Correlation Between Rural Funds and Balkan Mining

Can any of the company-specific risk be diversified away by investing in both Rural Funds and Balkan Mining 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 Rural Funds and Balkan Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rural Funds Group and Balkan Mining and, you can compare the effects of market volatilities on Rural Funds and Balkan Mining 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 Rural Funds with a short position of Balkan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rural Funds and Balkan Mining.

Diversification Opportunities for Rural Funds and Balkan Mining

0.33

Correlation Coefficient

Rural Funds  Balkan Mining

Weak diversification

The 3 months correlation between Rural and Balkan is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Rural Funds Group and Balkan Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balkan Mining and Rural Funds 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 Rural Funds Group are associated (or correlated) with Balkan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balkan Mining has no effect on the direction of Rural Funds i.e., Rural Funds and Balkan Mining go up and down completely randomly.

Pair Corralation between Rural Funds and Balkan Mining

Assuming the 90 days trading horizon Rural Funds Group is expected to generate 0.36 times more return on investment than Balkan Mining. However, Rural Funds Group is 2.81 times less risky than Balkan Mining. It trades about 0.06 of its potential returns per unit of risk. Balkan Mining and is currently generating about -0.02 per unit of risk. If you would invest  174.00  in Rural Funds Group on October 11, 2024 and sell it today you would earn a total of  2.00  from holding Rural Funds Group or generate 1.15% return on investment over 90 days.

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

Rural Funds Group  vs.  Balkan Mining and

Rural Funds Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rural Funds Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Balkan Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Balkan Mining and are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Balkan Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Rural Funds and Balkan Mining

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

The idea behind Rural Funds Group and Balkan Mining and 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.