Correlation Between Grande Portage and Rupert Resources

Can any of the company-specific risk be diversified away by investing in both Grande Portage 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 Grande Portage and Rupert 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 Rupert Resources, you can compare the effects of market volatilities on Grande Portage 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 Grande Portage with a short position of Rupert Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and Rupert Resources.

Diversification Opportunities for Grande Portage and Rupert Resources

0.41

Correlation Coefficient

Grande Portage  Rupert Resources

Very weak diversification

The 3 months correlation between Grande and Rupert is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Rupert Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rupert 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 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 Grande Portage i.e., Grande Portage and Rupert Resources go up and down completely randomly.

Pair Corralation between Grande Portage and Rupert Resources

Assuming the 90 days horizon Grande Portage Resources is expected to generate 2.41 times more return on investment than Rupert Resources. However, Grande Portage is 2.41 times more volatile than Rupert Resources. It trades about 0.02 of its potential returns per unit of risk. Rupert Resources is currently generating about 0.0 per unit of risk. If you would invest  19.00  in Grande Portage Resources on September 14, 2024 and sell it today you would lose (5.00) from holding Grande Portage Resources or give up 26.32% of portfolio value over 90 days.

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

Grande Portage Resources  vs.  Rupert 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.

Rupert Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rupert Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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 Grande Portage and Rupert Resources

The main advantage of trading using opposite Grande Portage and Rupert Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage 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 Grande Portage Resources 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.