Correlation Between Razor Energy and ROK Resources

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

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

Diversification Opportunities for Razor Energy and ROK Resources

0.0

Correlation Coefficient

Razor Energy  ROK Resources

Pay attention - limited upside

The 3 months correlation between Razor and ROK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Razor Energy Corp and ROK Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROK Resources and Razor Energy 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 Razor Energy Corp are associated (or correlated) with ROK Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROK Resources has no effect on the direction of Razor Energy i.e., Razor Energy and ROK Resources go up and down completely randomly.

Pair Corralation between Razor Energy and ROK Resources

If you would invest  11.00  in ROK Resources on December 27, 2024 and sell it today you would earn a total of  0.00  from holding ROK Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Razor Energy Corp  vs.  ROK Resources

Razor Energy Corp

Risk-Adjusted Performance

Very Weak

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

ROK Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ROK Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ROK Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Razor Energy and ROK Resources

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

The idea behind Razor Energy Corp and ROK Resources 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 Global Correlations module to find global opportunities by holding instruments from different markets.