Correlation Between Pasinex Resources and Boss Resources

Can any of the company-specific risk be diversified away by investing in both Pasinex Resources and Boss 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 Pasinex Resources and Boss Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pasinex Resources Limited and Boss Resources, you can compare the effects of market volatilities on Pasinex Resources and Boss 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 Pasinex Resources with a short position of Boss Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pasinex Resources and Boss Resources.

Diversification Opportunities for Pasinex Resources and Boss Resources

0.0

Correlation Coefficient

Pasinex Resources  Boss Resources

Pay attention - limited upside

The 3 months correlation between Pasinex and Boss is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pasinex Resources Limited and Boss Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boss Resources and Pasinex 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 Pasinex Resources Limited are associated (or correlated) with Boss Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boss Resources has no effect on the direction of Pasinex Resources i.e., Pasinex Resources and Boss Resources go up and down completely randomly.

Pair Corralation between Pasinex Resources and Boss Resources

Assuming the 90 days horizon Pasinex Resources Limited is expected to generate 6.0 times more return on investment than Boss Resources. However, Pasinex Resources is 6.0 times more volatile than Boss Resources. It trades about 0.04 of its potential returns per unit of risk. Boss Resources is currently generating about 0.02 per unit of risk. If you would invest  0.08  in Pasinex Resources Limited on December 2, 2024 and sell it today you would earn a total of  0.40  from holding Pasinex Resources Limited or generate 500.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.0%
Values	Daily Returns

Pasinex Resources Limited  vs.  Boss Resources

Pasinex Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pasinex Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pasinex Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Boss Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Boss Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic 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 Pasinex Resources and Boss Resources

The main advantage of trading using opposite Pasinex Resources and Boss Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pasinex Resources position performs unexpectedly, Boss 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 Boss Resources will offset losses from the drop in Boss Resources' long position.

The idea behind Pasinex Resources Limited and Boss Resources 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.