Correlation Between Tinka Resources and Aldebaran Resources

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

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

Diversification Opportunities for Tinka Resources and Aldebaran Resources

-0.35

Correlation Coefficient

Tinka Resources  Aldebaran Resources

Very good diversification

The 3 months correlation between Tinka and Aldebaran is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tinka Resources Limited and Aldebaran Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aldebaran Resources and Tinka 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 Tinka Resources Limited are associated (or correlated) with Aldebaran Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aldebaran Resources has no effect on the direction of Tinka Resources i.e., Tinka Resources and Aldebaran Resources go up and down completely randomly.

Pair Corralation between Tinka Resources and Aldebaran Resources

Assuming the 90 days horizon Tinka Resources Limited is expected to under-perform the Aldebaran Resources. In addition to that, Tinka Resources is 1.68 times more volatile than Aldebaran Resources. It trades about -0.03 of its total potential returns per unit of risk. Aldebaran Resources is currently generating about 0.05 per unit of volatility. If you would invest  135.00  in Aldebaran Resources on December 22, 2024 and sell it today you would earn a total of  12.00  from holding Aldebaran Resources or generate 8.89% return on investment over 90 days.

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

Tinka Resources Limited  vs.  Aldebaran Resources

Tinka Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tinka Resources Limited 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 technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Aldebaran Resources

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Tinka Resources and Aldebaran Resources

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

The idea behind Tinka Resources Limited and Aldebaran 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.