Correlation Between Red Moon and Exploits Discovery

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

By analyzing existing cross correlation between Red Moon Resources and Exploits Discovery Corp, you can compare the effects of market volatilities on Red Moon and Exploits Discovery 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 Red Moon with a short position of Exploits Discovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Moon and Exploits Discovery.

Diversification Opportunities for Red Moon and Exploits Discovery

0.74

Correlation Coefficient

Red Moon  Exploits Discovery

Poor diversification

The 3 months correlation between Red and Exploits is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Red Moon Resources and Exploits Discovery Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exploits Discovery Corp and Red Moon 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 Red Moon Resources are associated (or correlated) with Exploits Discovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exploits Discovery Corp has no effect on the direction of Red Moon i.e., Red Moon and Exploits Discovery go up and down completely randomly.

Pair Corralation between Red Moon and Exploits Discovery

Assuming the 90 days horizon Red Moon Resources is expected to generate 0.87 times more return on investment than Exploits Discovery. However, Red Moon Resources is 1.15 times less risky than Exploits Discovery. It trades about 0.19 of its potential returns per unit of risk. Exploits Discovery Corp is currently generating about 0.13 per unit of risk. If you would invest  30.00  in Red Moon Resources on July 7, 2025 and sell it today you would earn a total of  26.00  from holding Red Moon Resources or generate 86.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

Red Moon Resources  vs.  Exploits Discovery Corp

Red Moon Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Red Moon Resources are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Red Moon reported solid returns over the last few months and may actually be approaching a breakup point.

Exploits Discovery Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Exploits Discovery Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Exploits Discovery reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Red Moon and Exploits Discovery

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

The idea behind Red Moon Resources and Exploits Discovery Corp 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.