Correlation Between Red Pine and Mexus Gold

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

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

Diversification Opportunities for Red Pine and Mexus Gold

0.13

Correlation Coefficient

Red Pine  Mexus Gold

Average diversification

The 3 months correlation between Red and Mexus is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Red Pine Exploration and Mexus Gold Us in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexus Gold Us and Red Pine 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 Pine Exploration are associated (or correlated) with Mexus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexus Gold Us has no effect on the direction of Red Pine i.e., Red Pine and Mexus Gold go up and down completely randomly.

Pair Corralation between Red Pine and Mexus Gold

Assuming the 90 days horizon Red Pine is expected to generate 53.99 times less return on investment than Mexus Gold. But when comparing it to its historical volatility, Red Pine Exploration is 6.74 times less risky than Mexus Gold. It trades about 0.01 of its potential returns per unit of risk. Mexus Gold Us is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.04  in Mexus Gold Us on September 26, 2024 and sell it today you would lose (0.03) from holding Mexus Gold Us or give up 75.0% of portfolio value over 90 days.

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

Red Pine Exploration  vs.  Mexus Gold Us

Red Pine Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Red Pine Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Mexus Gold Us

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mexus Gold Us are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mexus Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Red Pine and Mexus Gold

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

The idea behind Red Pine Exploration and Mexus Gold Us 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.