Correlation Between Grande Portage and Renforth Resources

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

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

Diversification Opportunities for Grande Portage and Renforth Resources

0.05

Correlation Coefficient

Grande Portage  Renforth Resources

Significant diversification

The 3 months correlation between Grande and Renforth is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Renforth Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renforth Resources and Grande Portage 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 Grande Portage Resources are associated (or correlated) with Renforth Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renforth Resources has no effect on the direction of Grande Portage i.e., Grande Portage and Renforth Resources go up and down completely randomly.

Pair Corralation between Grande Portage and Renforth Resources

Assuming the 90 days horizon Grande Portage Resources is expected to under-perform the Renforth Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Grande Portage Resources is 3.76 times less risky than Renforth Resources. The otc stock trades about -0.03 of its potential returns per unit of risk. The Renforth Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1.20  in Renforth Resources on September 12, 2024 and sell it today you would lose (0.30) from holding Renforth Resources or give up 25.0% of portfolio value over 90 days.

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

Grande Portage Resources  vs.  Renforth Resources

Grande Portage Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grande Portage Resources 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Renforth Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Renforth Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Renforth Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grande Portage and Renforth Resources

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

The idea behind Grande Portage Resources and Renforth 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.