Correlation Between Rare Element and Medallion Resources

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

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

Diversification Opportunities for Rare Element and Medallion Resources

0.0

Correlation Coefficient

Rare Element  Medallion Resources

Pay attention - limited upside

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

Pair Corralation between Rare Element and Medallion Resources

If you would invest  5.30  in Medallion Resources on December 1, 2024 and sell it today you would lose (0.20) from holding Medallion Resources or give up 3.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Rare Element Resources  vs.  Medallion Resources

Rare Element Resources

Risk-Adjusted Performance

Very Weak

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

Medallion Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Medallion Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Medallion Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rare Element and Medallion Resources

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

The idea behind Rare Element Resources and Medallion 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.