Correlation Between Rathdowney Resources and Sulliden Minerals

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

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

Diversification Opportunities for Rathdowney Resources and Sulliden Minerals

-0.72

Correlation Coefficient

Rathdowney Resources  Sulliden Minerals

Pay attention - limited upside

The 3 months correlation between Rathdowney and Sulliden is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Rathdowney Resources and Sulliden Minerals SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulliden Minerals and Rathdowney 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 Rathdowney Resources are associated (or correlated) with Sulliden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulliden Minerals has no effect on the direction of Rathdowney Resources i.e., Rathdowney Resources and Sulliden Minerals go up and down completely randomly.

Pair Corralation between Rathdowney Resources and Sulliden Minerals

Assuming the 90 days horizon Rathdowney Resources is expected to generate 1.66 times more return on investment than Sulliden Minerals. However, Rathdowney Resources is 1.66 times more volatile than Sulliden Minerals SA. It trades about 0.15 of its potential returns per unit of risk. Sulliden Minerals SA is currently generating about -0.05 per unit of risk. If you would invest  1.00  in Rathdowney Resources on December 1, 2024 and sell it today you would earn a total of  1.50  from holding Rathdowney Resources or generate 150.0% return on investment over 90 days.

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

Rathdowney Resources  vs.  Sulliden Minerals SA

Rathdowney Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rathdowney Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Rathdowney Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Sulliden Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sulliden Minerals SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Rathdowney Resources and Sulliden Minerals

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

The idea behind Rathdowney Resources and Sulliden Minerals SA 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.