Correlation Between PJX Resources and RT Minerals

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

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

Diversification Opportunities for PJX Resources and RT Minerals

0.61

Correlation Coefficient

PJX Resources  RT Minerals

Poor diversification

The 3 months correlation between PJX and RTM is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PJX Resources 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 PJX 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 PJX Resources 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 PJX Resources i.e., PJX Resources and RT Minerals go up and down completely randomly.

Pair Corralation between PJX Resources and RT Minerals

Assuming the 90 days horizon PJX Resources is expected to under-perform the RT Minerals. In addition to that, PJX Resources is 1.53 times more volatile than RT Minerals Corp. It trades about -0.1 of its total potential returns per unit of risk. RT Minerals Corp is currently generating about -0.07 per unit of volatility. If you would invest  19.00  in RT Minerals Corp on September 23, 2024 and sell it today you would lose (8.00) from holding RT Minerals Corp or give up 42.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.21%
Values	Daily Returns

PJX Resources  vs.  RT Minerals Corp

PJX Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PJX Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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 PJX Resources and RT Minerals

The main advantage of trading using opposite PJX Resources and RT Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJX Resources 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 PJX Resources 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.