Correlation Between Jindalee Resources and Tinka Resources

Can any of the company-specific risk be diversified away by investing in both Jindalee Resources and Tinka Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jindalee Resources and Tinka Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jindalee Resources Limited and Tinka Resources Limited, you can compare the effects of market volatilities on Jindalee Resources and Tinka Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jindalee Resources with a short position of Tinka Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jindalee Resources and Tinka Resources.

Diversification Opportunities for Jindalee Resources and Tinka Resources

0.13

Correlation Coefficient

Jindalee Resources  Tinka Resources

Average diversification

The 3 months correlation between Jindalee and Tinka is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jindalee Resources Limited and Tinka Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinka Resources and Jindalee Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jindalee Resources Limited are associated (or correlated) with Tinka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinka Resources has no effect on the direction of Jindalee Resources i.e., Jindalee Resources and Tinka Resources go up and down completely randomly.

Pair Corralation between Jindalee Resources and Tinka Resources

Assuming the 90 days horizon Jindalee Resources Limited is expected to under-perform the Tinka Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Jindalee Resources Limited is 1.19 times less risky than Tinka Resources. The otc stock trades about -0.11 of its potential returns per unit of risk. The Tinka Resources Limited is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Tinka Resources Limited on October 9, 2024 and sell it today you would lose (1.00) from holding Tinka Resources Limited or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jindalee Resources Limited  vs.  Tinka Resources Limited

Jindalee Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jindalee Resources Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jindalee Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Tinka Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tinka Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Jindalee Resources and Tinka Resources

The main advantage of trading using opposite Jindalee Resources and Tinka Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jindalee Resources position performs unexpectedly, Tinka Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tinka Resources will offset losses from the drop in Tinka Resources' long position.

The idea behind Jindalee Resources Limited and Tinka Resources Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..