Correlation Between SPACE and Rupert Resources

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

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

Diversification Opportunities for SPACE and Rupert Resources

-0.08

Correlation Coefficient

SPACE  Rupert Resources

Good diversification

The 3 months correlation between SPACE and Rupert is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Rupert Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rupert Resources and SPACE 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 SPACE are associated (or correlated) with Rupert Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rupert Resources has no effect on the direction of SPACE i.e., SPACE and Rupert Resources go up and down completely randomly.

Pair Corralation between SPACE and Rupert Resources

Assuming the 90 days horizon SPACE is expected to generate 2.1 times more return on investment than Rupert Resources. However, SPACE is 2.1 times more volatile than Rupert Resources. It trades about 0.23 of its potential returns per unit of risk. Rupert Resources is currently generating about -0.03 per unit of risk. If you would invest  32.00  in SPACE on September 4, 2024 and sell it today you would earn a total of  28.00  from holding SPACE or generate 87.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

SPACE  vs.  Rupert Resources

SPACE

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SPACE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Rupert Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SPACE and Rupert Resources

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

The idea behind SPACE and Rupert 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.