Correlation Between Sama Resources and Cariboo Rose
Can any of the company-specific risk be diversified away by investing in both Sama Resources and Cariboo Rose 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 Sama Resources and Cariboo Rose into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sama Resources and Cariboo Rose Resources, you can compare the effects of market volatilities on Sama Resources and Cariboo Rose 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 Sama Resources with a short position of Cariboo Rose. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sama Resources and Cariboo Rose.
Diversification Opportunities for Sama Resources and Cariboo Rose
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sama and Cariboo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sama Resources and Cariboo Rose Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cariboo Rose Resources and Sama 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 Sama Resources are associated (or correlated) with Cariboo Rose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cariboo Rose Resources has no effect on the direction of Sama Resources i.e., Sama Resources and Cariboo Rose go up and down completely randomly.
Pair Corralation between Sama Resources and Cariboo Rose
Assuming the 90 days horizon Sama Resources is expected to under-perform the Cariboo Rose. But the stock apears to be less risky and, when comparing its historical volatility, Sama Resources is 2.35 times less risky than Cariboo Rose. The stock trades about -0.05 of its potential returns per unit of risk. The Cariboo Rose Resources is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4.00 in Cariboo Rose Resources on March 28, 2024 and sell it today you would earn a total of 1.00 from holding Cariboo Rose Resources or generate 25.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 95.65% |
Values | Daily Returns |
Sama Resources vs. Cariboo Rose Resources
Performance |
Timeline |
Sama Resources |
Cariboo Rose Resources |
Sama Resources and Cariboo Rose Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sama Resources and Cariboo Rose
The main advantage of trading using opposite Sama Resources and Cariboo Rose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sama Resources position performs unexpectedly, Cariboo Rose 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 Cariboo Rose will offset losses from the drop in Cariboo Rose's long position.The idea behind Sama Resources and Cariboo Rose 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.Check out your portfolio center.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Global Correlations Find global opportunities by holding instruments from different markets |