Correlation Between Red Moon and Aston Minerals

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

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

Diversification Opportunities for Red Moon and Aston Minerals

0.0

Correlation Coefficient

Red Moon  Aston Minerals

Pay attention - limited upside

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

Pair Corralation between Red Moon and Aston Minerals

If you would invest  0.50  in Aston Minerals on December 25, 2024 and sell it today you would earn a total of  0.00  from holding Aston Minerals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Red Moon Resources  vs.  Aston Minerals

Red Moon Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Red Moon Resources 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 April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Aston Minerals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Red Moon and Aston Minerals

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

The idea behind Red Moon Resources and Aston Minerals 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..