Correlation Between Aldebaran Resources and Minsud Resources

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

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

Diversification Opportunities for Aldebaran Resources and Minsud Resources

-0.46

Correlation Coefficient

Aldebaran Resources  Minsud Resources

Very good diversification

The 3 months correlation between Aldebaran and Minsud is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Aldebaran Resources and Minsud Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minsud Resources Corp and Aldebaran 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 Aldebaran Resources are associated (or correlated) with Minsud Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minsud Resources Corp has no effect on the direction of Aldebaran Resources i.e., Aldebaran Resources and Minsud Resources go up and down completely randomly.

Pair Corralation between Aldebaran Resources and Minsud Resources

Assuming the 90 days horizon Aldebaran Resources is expected to generate 0.57 times more return on investment than Minsud Resources. However, Aldebaran Resources is 1.76 times less risky than Minsud Resources. It trades about 0.07 of its potential returns per unit of risk. Minsud Resources Corp is currently generating about -0.05 per unit of risk. If you would invest  53.00  in Aldebaran Resources on February 21, 2024 and sell it today you would earn a total of  35.00  from holding Aldebaran Resources or generate 66.04% return on investment over 90 days.

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

Aldebaran Resources  vs.  Minsud Resources Corp

Aldebaran Resources

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aldebaran Resources are ranked lower than 14 (%) 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.

Minsud Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minsud Resources Corp 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 basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Aldebaran Resources and Minsud Resources

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

The idea behind Aldebaran Resources and Minsud Resources Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.