Correlation Between RESMINING UNSPADR10 and Broadwind

Can any of the company-specific risk be diversified away by investing in both RESMINING UNSPADR10 and Broadwind 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 RESMINING UNSPADR10 and Broadwind into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RESMINING UNSPADR10 and Broadwind, you can compare the effects of market volatilities on RESMINING UNSPADR10 and Broadwind 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 RESMINING UNSPADR10 with a short position of Broadwind. Check out your portfolio center. Please also check ongoing floating volatility patterns of RESMINING UNSPADR10 and Broadwind.

Diversification Opportunities for RESMINING UNSPADR10 and Broadwind

0.56

Correlation Coefficient

RESMINING UNSPADR10  Broadwind

Very weak diversification

The 3 months correlation between RESMINING and Broadwind is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding RESMINING UNSPADR10 and Broadwind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadwind and RESMINING UNSPADR10 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 RESMINING UNSPADR10 are associated (or correlated) with Broadwind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadwind has no effect on the direction of RESMINING UNSPADR10 i.e., RESMINING UNSPADR10 and Broadwind go up and down completely randomly.

Pair Corralation between RESMINING UNSPADR10 and Broadwind

Assuming the 90 days trading horizon RESMINING UNSPADR10 is expected to generate 1.25 times less return on investment than Broadwind. But when comparing it to its historical volatility, RESMINING UNSPADR10 is 1.16 times less risky than Broadwind. It trades about 0.14 of its potential returns per unit of risk. Broadwind is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  143.00  in Broadwind on April 20, 2025 and sell it today you would earn a total of  66.00  from holding Broadwind or generate 46.15% return on investment over 90 days.

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

RESMINING UNSPADR10  vs.  Broadwind

RESMINING UNSPADR10

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RESMINING UNSPADR10 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, RESMINING UNSPADR10 reported solid returns over the last few months and may actually be approaching a breakup point.

Broadwind

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Broadwind are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Broadwind reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RESMINING UNSPADR10 and Broadwind

The main advantage of trading using opposite RESMINING UNSPADR10 and Broadwind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RESMINING UNSPADR10 position performs unexpectedly, Broadwind 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 Broadwind will offset losses from the drop in Broadwind's long position.

The idea behind RESMINING UNSPADR10 and Broadwind 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.