Correlation Between Rio Tinto and Minsud Resources

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

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

Diversification Opportunities for Rio Tinto and Minsud Resources

-0.1

Correlation Coefficient

Rio Tinto  Minsud Resources

Good diversification

The 3 months correlation between Rio and Minsud is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Rio Tinto ADR and Minsud Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minsud Resources Corp and Rio Tinto 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 Rio Tinto ADR are associated (or correlated) with Minsud Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minsud Resources Corp has no effect on the direction of Rio Tinto i.e., Rio Tinto and Minsud Resources go up and down completely randomly.

Pair Corralation between Rio Tinto and Minsud Resources

Considering the 90-day investment horizon Rio Tinto ADR is expected to generate 0.63 times more return on investment than Minsud Resources. However, Rio Tinto ADR is 1.58 times less risky than Minsud Resources. It trades about 0.0 of its potential returns per unit of risk. Minsud Resources Corp is currently generating about -0.16 per unit of risk. If you would invest  5,980  in Rio Tinto ADR on May 6, 2025 and sell it today you would lose (15.00) from holding Rio Tinto ADR or give up 0.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Rio Tinto ADR  vs.  Minsud Resources Corp

Rio Tinto ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rio Tinto ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Rio Tinto is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Minsud Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Minsud Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Rio Tinto and Minsud Resources

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

The idea behind Rio Tinto ADR and Minsud Resources 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.