Correlation Between Impax Asset and Resolute Mining

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

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

Diversification Opportunities for Impax Asset and Resolute Mining

0.88

Correlation Coefficient

Impax Asset  Resolute Mining

Very poor diversification

The 3 months correlation between Impax and Resolute is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Impax Asset Management and Resolute Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resolute Mining and Impax Asset 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 Impax Asset Management 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 Impax Asset i.e., Impax Asset and Resolute Mining go up and down completely randomly.

Pair Corralation between Impax Asset and Resolute Mining

Assuming the 90 days trading horizon Impax Asset Management is expected to generate 0.66 times more return on investment than Resolute Mining. However, Impax Asset Management is 1.52 times less risky than Resolute Mining. It trades about 0.29 of its potential returns per unit of risk. Resolute Mining Limited is currently generating about 0.14 per unit of risk. If you would invest  13,531  in Impax Asset Management on April 22, 2025 and sell it today you would earn a total of  7,169  from holding Impax Asset Management or generate 52.98% return on investment over 90 days.

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

Impax Asset Management  vs.  Resolute Mining Limited

Impax Asset Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Impax Asset Management are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Impax Asset exhibited solid returns over the last few months and may actually be approaching a breakup point.

Resolute Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Resolute Mining Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady 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 Impax Asset and Resolute Mining

The main advantage of trading using opposite Impax Asset and Resolute Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Asset 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 Impax Asset Management 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.

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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.