Correlation Between SPACE and Big Ridge

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Can any of the company-specific risk be diversified away by investing in both SPACE and Big Ridge 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 Big Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPACE and Big Ridge Gold, you can compare the effects of market volatilities on SPACE and Big Ridge 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 Big Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPACE and Big Ridge.

Diversification Opportunities for SPACE and Big Ridge

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between SPACE and Big is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Big Ridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Ridge Gold 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 Big Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Ridge Gold has no effect on the direction of SPACE i.e., SPACE and Big Ridge go up and down completely randomly.

Pair Corralation between SPACE and Big Ridge

Assuming the 90 days horizon SPACE is expected to generate 0.78 times more return on investment than Big Ridge. However, SPACE is 1.28 times less risky than Big Ridge. It trades about 0.55 of its potential returns per unit of risk. Big Ridge Gold is currently generating about 0.03 per unit of risk. If you would invest  36.00  in SPACE on September 5, 2024 and sell it today you would earn a total of  27.00  from holding SPACE or generate 75.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy91.3%
ValuesDaily Returns

SPACE  vs.  Big Ridge Gold

 Performance 
       Timeline  
SPACE 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in SPACE are ranked lower than 20 (%) 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.
Big Ridge Gold 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Big Ridge Gold are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Big Ridge reported solid returns over the last few months and may actually be approaching a breakup point.

SPACE and Big Ridge Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SPACE and Big Ridge

The main advantage of trading using opposite SPACE and Big Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPACE position performs unexpectedly, Big Ridge 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 Big Ridge will offset losses from the drop in Big Ridge's long position.
The idea behind SPACE and Big Ridge Gold 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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