Correlation Between Global Resources and Access Capital

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

By analyzing existing cross correlation between Global Resources Fund and Access Capital Munity, you can compare the effects of market volatilities on Global Resources and Access Capital 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 Global Resources with a short position of Access Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Resources and Access Capital.

Diversification Opportunities for Global Resources and Access Capital

-0.44

Correlation Coefficient

Global Resources  Access Capital

Very good diversification

The 3 months correlation between Global and Access is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Global Resources Fund and Access Capital Munity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Access Capital Munity and Global 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 Global Resources Fund are associated (or correlated) with Access Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Access Capital Munity has no effect on the direction of Global Resources i.e., Global Resources and Access Capital go up and down completely randomly.

Pair Corralation between Global Resources and Access Capital

Assuming the 90 days horizon Global Resources Fund is expected to generate 4.06 times more return on investment than Access Capital. However, Global Resources is 4.06 times more volatile than Access Capital Munity. It trades about 0.03 of its potential returns per unit of risk. Access Capital Munity is currently generating about 0.05 per unit of risk. If you would invest  369.00  in Global Resources Fund on January 28, 2025 and sell it today you would earn a total of  8.00  from holding Global Resources Fund or generate 2.17% return on investment over 90 days.

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

Global Resources Fund  vs.  Access Capital Munity

Global Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Resources Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Global Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Access Capital Munity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Access Capital Munity are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Access Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Resources and Access Capital

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

The idea behind Global Resources Fund and Access Capital Munity 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.