Correlation Between Red Branch and Minerals Technologies

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

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

Diversification Opportunities for Red Branch and Minerals Technologies

0.0

Correlation Coefficient

Red Branch  Minerals Technologies

Pay attention - limited upside

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

Pair Corralation between Red Branch and Minerals Technologies

If you would invest  0.01  in Red Branch Technologies on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Red Branch Technologies or generate 0.0% return on investment over 90 days.

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

Red Branch Technologies  vs.  Minerals Technologies

Red Branch Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Red Branch Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Red Branch is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Minerals Technologies

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Minerals Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Minerals Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Red Branch and Minerals Technologies

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

The idea behind Red Branch Technologies and Minerals Technologies 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.