Correlation Between Ressources Minieres and Red Pine

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

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

Diversification Opportunities for Ressources Minieres and Red Pine

0.52

Correlation Coefficient

Ressources Minieres  Red Pine

Very weak diversification

The 3 months correlation between Ressources and Red is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Ressources Minieres Radisson and Red Pine Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Pine Exploration and Ressources Minieres 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 Ressources Minieres Radisson are associated (or correlated) with Red Pine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Pine Exploration has no effect on the direction of Ressources Minieres i.e., Ressources Minieres and Red Pine go up and down completely randomly.

Pair Corralation between Ressources Minieres and Red Pine

Assuming the 90 days horizon Ressources Minieres Radisson is expected to generate 0.88 times more return on investment than Red Pine. However, Ressources Minieres Radisson is 1.14 times less risky than Red Pine. It trades about 0.01 of its potential returns per unit of risk. Red Pine Exploration is currently generating about 0.0 per unit of risk. If you would invest  33.00  in Ressources Minieres Radisson on December 29, 2024 and sell it today you would lose (1.00) from holding Ressources Minieres Radisson or give up 3.03% of portfolio value over 90 days.

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

Ressources Minieres Radisson  vs.  Red Pine Exploration

Ressources Minieres

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ressources Minieres Radisson has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ressources Minieres is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Red Pine Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Red Pine Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Red Pine is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ressources Minieres and Red Pine

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

The idea behind Ressources Minieres Radisson and Red Pine Exploration 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.