Correlation Between Income Financial and RT Minerals

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

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

Diversification Opportunities for Income Financial and RT Minerals

-0.69

Correlation Coefficient

Income Financial  RT Minerals

Excellent diversification

The 3 months correlation between Income and RTM is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Income Financial Trust and RT Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RT Minerals Corp and Income Financial 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 Income Financial Trust are associated (or correlated) with RT Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RT Minerals Corp has no effect on the direction of Income Financial i.e., Income Financial and RT Minerals go up and down completely randomly.

Pair Corralation between Income Financial and RT Minerals

Assuming the 90 days trading horizon Income Financial Trust is expected to generate 0.32 times more return on investment than RT Minerals. However, Income Financial Trust is 3.12 times less risky than RT Minerals. It trades about 0.12 of its potential returns per unit of risk. RT Minerals Corp is currently generating about -0.05 per unit of risk. If you would invest  782.00  in Income Financial Trust on September 28, 2024 and sell it today you would earn a total of  74.00  from holding Income Financial Trust or generate 9.46% return on investment over 90 days.

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

Income Financial Trust  vs.  RT Minerals Corp

Income Financial Trust

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Income Financial Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental indicators, Income Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

RT Minerals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RT Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Income Financial and RT Minerals

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

The idea behind Income Financial Trust and RT Minerals 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.