Correlation Between Renascor Resources and Close Loop

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

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

Diversification Opportunities for Renascor Resources and Close Loop

-0.7

Correlation Coefficient

Renascor Resources  Close Loop

Excellent diversification

The 3 months correlation between Renascor and Close is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Renascor Resources and Close The Loop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Close The Loop and Renascor Resources 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 Renascor Resources are associated (or correlated) with Close Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Close The Loop has no effect on the direction of Renascor Resources i.e., Renascor Resources and Close Loop go up and down completely randomly.

Pair Corralation between Renascor Resources and Close Loop

Assuming the 90 days trading horizon Renascor Resources is expected to under-perform the Close Loop. But the stock apears to be less risky and, when comparing its historical volatility, Renascor Resources is 1.62 times less risky than Close Loop. The stock trades about -0.06 of its potential returns per unit of risk. The Close The Loop is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Close The Loop on October 6, 2024 and sell it today you would earn a total of  6.00  from holding Close The Loop or generate 33.33% return on investment over 90 days.

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

Renascor Resources  vs.  Close The Loop

Renascor Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Renascor Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Close The Loop

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Close The Loop are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Close Loop unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Renascor Resources and Close Loop

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

The idea behind Renascor Resources and Close The Loop 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.