Correlation Between Rio Tinto and Compaa Minera
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By analyzing existing cross correlation between Rio Tinto Group and Compaa Minera Autln, you can compare the effects of market volatilities on Rio Tinto and Compaa Minera 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 Rio Tinto with a short position of Compaa Minera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rio Tinto and Compaa Minera.
Diversification Opportunities for Rio Tinto and Compaa Minera
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rio and Compaa is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Rio Tinto Group and Compaa Minera Autln in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compaa Minera Autln and Rio Tinto 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 Rio Tinto Group are associated (or correlated) with Compaa Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compaa Minera Autln has no effect on the direction of Rio Tinto i.e., Rio Tinto and Compaa Minera go up and down completely randomly.
Pair Corralation between Rio Tinto and Compaa Minera
Assuming the 90 days trading horizon Rio Tinto Group is expected to generate 1.02 times more return on investment than Compaa Minera. However, Rio Tinto is 1.02 times more volatile than Compaa Minera Autln. It trades about 0.01 of its potential returns per unit of risk. Compaa Minera Autln is currently generating about -0.06 per unit of risk. If you would invest 120,861 in Rio Tinto Group on September 23, 2024 and sell it today you would lose (961.00) from holding Rio Tinto Group or give up 0.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Rio Tinto Group vs. Compaa Minera Autln
Performance |
Timeline |
Rio Tinto Group |
Compaa Minera Autln |
Rio Tinto and Compaa Minera Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rio Tinto and Compaa Minera
The main advantage of trading using opposite Rio Tinto and Compaa Minera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rio Tinto position performs unexpectedly, Compaa Minera 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 Compaa Minera will offset losses from the drop in Compaa Minera's long position.Rio Tinto vs. BHP Group | Rio Tinto vs. Vale SA | Rio Tinto vs. Glencore plc | Rio Tinto vs. Cleveland Cliffs |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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