Correlation Between Abacus Mining and Laramide Resources

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

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

Diversification Opportunities for Abacus Mining and Laramide Resources

0.0

Correlation Coefficient

Abacus Mining  Laramide Resources

Pay attention - limited upside

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

Pair Corralation between Abacus Mining and Laramide Resources

Assuming the 90 days horizon Abacus Mining and is expected to under-perform the Laramide Resources. In addition to that, Abacus Mining is 2.66 times more volatile than Laramide Resources. It trades about -0.14 of its total potential returns per unit of risk. Laramide Resources is currently generating about 0.3 per unit of volatility. If you would invest  73.00  in Laramide Resources on February 29, 2024 and sell it today you would earn a total of  11.00  from holding Laramide Resources or generate 15.07% return on investment over 90 days.

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

Abacus Mining and  vs.  Laramide Resources

Abacus Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Abacus Mining and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Abacus Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Laramide Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Laramide Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Laramide Resources may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Abacus Mining and Laramide Resources

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

The idea behind Abacus Mining and and Laramide 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.