Correlation Between CAP LEASE and Rockfire Resources

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

By analyzing existing cross correlation between CAP LEASE AVIATION and Rockfire Resources plc, you can compare the effects of market volatilities on CAP LEASE and Rockfire Resources 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 CAP LEASE with a short position of Rockfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Rockfire Resources.

Diversification Opportunities for CAP LEASE and Rockfire Resources

0.0

Correlation Coefficient

CAP LEASE  Rockfire Resources

Pay attention - limited upside

The 3 months correlation between CAP and Rockfire is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Rockfire Resources plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockfire Resources plc and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with Rockfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockfire Resources plc has no effect on the direction of CAP LEASE i.e., CAP LEASE and Rockfire Resources go up and down completely randomly.

Pair Corralation between CAP LEASE and Rockfire Resources

If you would invest  8.50  in Rockfire Resources plc on April 23, 2025 and sell it today you would earn a total of  2.50  from holding Rockfire Resources plc or generate 29.41% return on investment over 90 days.

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

CAP LEASE AVIATION  vs.  Rockfire Resources plc

CAP LEASE AVIATION

Risk-Adjusted Performance

Very Weak

Over the last 90 days CAP LEASE AVIATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CAP LEASE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Rockfire Resources plc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rockfire Resources plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Rockfire Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CAP LEASE and Rockfire Resources

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

The idea behind CAP LEASE AVIATION and Rockfire Resources plc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..