Correlation Between Rimrock Gold and MedMira

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

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

Diversification Opportunities for Rimrock Gold and MedMira

-0.11

Correlation Coefficient

Rimrock Gold  MedMira

Good diversification

The 3 months correlation between Rimrock and MedMira is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Rimrock Gold Corp and MedMira in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MedMira and Rimrock Gold 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 Rimrock Gold Corp are associated (or correlated) with MedMira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MedMira has no effect on the direction of Rimrock Gold i.e., Rimrock Gold and MedMira go up and down completely randomly.

Pair Corralation between Rimrock Gold and MedMira

Given the investment horizon of 90 days Rimrock Gold is expected to generate 3.08 times less return on investment than MedMira. But when comparing it to its historical volatility, Rimrock Gold Corp is 2.71 times less risky than MedMira. It trades about 0.07 of its potential returns per unit of risk. MedMira is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9.00  in MedMira on October 10, 2024 and sell it today you would lose (7.69) from holding MedMira or give up 85.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Rimrock Gold Corp  vs.  MedMira

Rimrock Gold Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rimrock Gold Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Rimrock Gold disclosed solid returns over the last few months and may actually be approaching a breakup point.

MedMira

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Rimrock Gold and MedMira

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

The idea behind Rimrock Gold Corp and MedMira 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.