Correlation Between Radisson Mining and Sailfish Royalty

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

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

Diversification Opportunities for Radisson Mining and Sailfish Royalty

-0.29

Correlation Coefficient

Radisson Mining  Sailfish Royalty

Very good diversification

The 3 months correlation between Radisson and Sailfish is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Radisson Mining Resources and Sailfish Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sailfish Royalty Corp and Radisson Mining 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 Radisson Mining Resources are associated (or correlated) with Sailfish Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sailfish Royalty Corp has no effect on the direction of Radisson Mining i.e., Radisson Mining and Sailfish Royalty go up and down completely randomly.

Pair Corralation between Radisson Mining and Sailfish Royalty

Assuming the 90 days horizon Radisson Mining Resources is expected to generate 1.22 times more return on investment than Sailfish Royalty. However, Radisson Mining is 1.22 times more volatile than Sailfish Royalty Corp. It trades about 0.05 of its potential returns per unit of risk. Sailfish Royalty Corp is currently generating about 0.04 per unit of risk. If you would invest  14.00  in Radisson Mining Resources on October 11, 2024 and sell it today you would earn a total of  10.00  from holding Radisson Mining Resources or generate 71.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.55%
Values	Daily Returns

Radisson Mining Resources  vs.  Sailfish Royalty Corp

Radisson Mining Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Radisson Mining Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Radisson Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Sailfish Royalty Corp

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Radisson Mining and Sailfish Royalty

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

The idea behind Radisson Mining Resources and Sailfish Royalty Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.