Correlation Between Newport Exploration and Western Resources
Can any of the company-specific risk be diversified away by investing in both Newport Exploration and Western 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 Newport Exploration and Western Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newport Exploration and Western Resources Corp, you can compare the effects of market volatilities on Newport Exploration and Western 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 Newport Exploration with a short position of Western Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newport Exploration and Western Resources.
Diversification Opportunities for Newport Exploration and Western Resources
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Newport and Western is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Newport Exploration and Western Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Resources Corp and Newport Exploration 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 Newport Exploration are associated (or correlated) with Western Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Resources Corp has no effect on the direction of Newport Exploration i.e., Newport Exploration and Western Resources go up and down completely randomly.
Pair Corralation between Newport Exploration and Western Resources
Assuming the 90 days horizon Newport Exploration is expected to under-perform the Western Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Newport Exploration is 1.44 times less risky than Western Resources. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Western Resources Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.23 in Western Resources Corp on December 29, 2024 and sell it today you would earn a total of 0.30 from holding Western Resources Corp or generate 13.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.31% |
Values | Daily Returns |
Newport Exploration vs. Western Resources Corp
Performance |
Timeline |
Newport Exploration |
Western Resources Corp |
Newport Exploration and Western Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Newport Exploration and Western Resources
The main advantage of trading using opposite Newport Exploration and Western Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newport Exploration position performs unexpectedly, Western 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 Western Resources will offset losses from the drop in Western Resources' long position.Newport Exploration vs. Traction Uranium Corp | Newport Exploration vs. New Age Metals | Newport Exploration vs. York Harbour Metals | Newport Exploration vs. Silver Elephant Mining |
Western Resources vs. Wolfden Resources | Western Resources vs. Newport Exploration | Western Resources vs. BeMetals Corp | Western Resources vs. Giyani Metals Corp |
Check out your portfolio center.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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