Correlation Between Yorbeau Resources and Starcore International

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

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

Diversification Opportunities for Yorbeau Resources and Starcore International

0.17

Correlation Coefficient

Yorbeau Resources  Starcore International

Average diversification

The 3 months correlation between Yorbeau and Starcore is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Yorbeau Resources and Starcore International Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starcore International and Yorbeau 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 Yorbeau Resources are associated (or correlated) with Starcore International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starcore International has no effect on the direction of Yorbeau Resources i.e., Yorbeau Resources and Starcore International go up and down completely randomly.

Pair Corralation between Yorbeau Resources and Starcore International

Assuming the 90 days trading horizon Yorbeau Resources is expected to generate 1.19 times more return on investment than Starcore International. However, Yorbeau Resources is 1.19 times more volatile than Starcore International Mines. It trades about 0.03 of its potential returns per unit of risk. Starcore International Mines is currently generating about 0.02 per unit of risk. If you would invest  5.00  in Yorbeau Resources on September 21, 2024 and sell it today you would lose (1.00) from holding Yorbeau Resources or give up 20.0% of portfolio value over 90 days.

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

Yorbeau Resources  vs.  Starcore International Mines

Yorbeau Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yorbeau Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Yorbeau Resources is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Starcore International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Starcore International Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Yorbeau Resources and Starcore International

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

The idea behind Yorbeau Resources and Starcore International Mines 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.