Correlation Between Rio Tinto and Apostle Dundas

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

By analyzing existing cross correlation between Rio Tinto and Apostle Dundas Global, you can compare the effects of market volatilities on Rio Tinto and Apostle Dundas 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 Rio Tinto with a short position of Apostle Dundas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rio Tinto and Apostle Dundas.

Diversification Opportunities for Rio Tinto and Apostle Dundas

0.0

Correlation Coefficient

Rio Tinto  Apostle Dundas

Pay attention - limited upside

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

Pair Corralation between Rio Tinto and Apostle Dundas

If you would invest  12,680  in Rio Tinto on February 17, 2024 and sell it today you would earn a total of  359.00  from holding Rio Tinto or generate 2.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Rio Tinto  vs.  Apostle Dundas Global

Rio Tinto

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rio Tinto are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Rio Tinto is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Apostle Dundas Global

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Apostle Dundas Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Apostle Dundas is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Rio Tinto and Apostle Dundas

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

The idea behind Rio Tinto and Apostle Dundas Global 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.