Correlation Between Flinders Resources and Richards Packaging

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

By analyzing existing cross correlation between Flinders Resources Limited and Richards Packaging Income, you can compare the effects of market volatilities on Flinders Resources and Richards Packaging 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 Flinders Resources with a short position of Richards Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and Richards Packaging.

Diversification Opportunities for Flinders Resources and Richards Packaging

-0.57

Correlation Coefficient

Flinders Resources  Richards Packaging

Excellent diversification

The 3 months correlation between Flinders and Richards is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and Richards Packaging Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richards Packaging Income and Flinders 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 Flinders Resources Limited are associated (or correlated) with Richards Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richards Packaging Income has no effect on the direction of Flinders Resources i.e., Flinders Resources and Richards Packaging go up and down completely randomly.

Pair Corralation between Flinders Resources and Richards Packaging

Assuming the 90 days horizon Flinders Resources Limited is expected to under-perform the Richards Packaging. In addition to that, Flinders Resources is 3.96 times more volatile than Richards Packaging Income. It trades about -0.08 of its total potential returns per unit of risk. Richards Packaging Income is currently generating about 0.29 per unit of volatility. If you would invest  2,719  in Richards Packaging Income on April 24, 2025 and sell it today you would earn a total of  606.00  from holding Richards Packaging Income or generate 22.29% return on investment over 90 days.

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

Flinders Resources Limited  vs.  Richards Packaging Income

Flinders Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flinders Resources Limited 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 basic indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Richards Packaging Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Richards Packaging Income are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating forward indicators, Richards Packaging sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flinders Resources and Richards Packaging

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

The idea behind Flinders Resources Limited and Richards Packaging Income 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.