Correlation Between Bloomsbury Publishing and Resolute Mining

Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing and Resolute Mining 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 Bloomsbury Publishing and Resolute Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bloomsbury Publishing Plc and Resolute Mining Limited, you can compare the effects of market volatilities on Bloomsbury Publishing and Resolute Mining 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 Bloomsbury Publishing with a short position of Resolute Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and Resolute Mining.

Diversification Opportunities for Bloomsbury Publishing and Resolute Mining

-0.58

Correlation Coefficient

Bloomsbury Publishing  Resolute Mining

Excellent diversification

The 3 months correlation between Bloomsbury and Resolute is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and Resolute Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resolute Mining and Bloomsbury Publishing 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 Bloomsbury Publishing Plc are associated (or correlated) with Resolute Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resolute Mining has no effect on the direction of Bloomsbury Publishing i.e., Bloomsbury Publishing and Resolute Mining go up and down completely randomly.

Pair Corralation between Bloomsbury Publishing and Resolute Mining

Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to under-perform the Resolute Mining. But the stock apears to be less risky and, when comparing its historical volatility, Bloomsbury Publishing Plc is 1.13 times less risky than Resolute Mining. The stock trades about -0.05 of its potential returns per unit of risk. The Resolute Mining Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,295  in Resolute Mining Limited on April 25, 2025 and sell it today you would earn a total of  890.00  from holding Resolute Mining Limited or generate 38.78% return on investment over 90 days.

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

Bloomsbury Publishing Plc  vs.  Resolute Mining Limited

Bloomsbury Publishing Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bloomsbury Publishing Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Resolute Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Resolute Mining Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Resolute Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bloomsbury Publishing and Resolute Mining

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

The idea behind Bloomsbury Publishing Plc and Resolute Mining Limited 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.