Correlation Between Honey Badger and Rainy Mountain

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

By analyzing existing cross correlation between Honey Badger Silver and Rainy Mountain Royalty, you can compare the effects of market volatilities on Honey Badger and Rainy Mountain 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 Honey Badger with a short position of Rainy Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honey Badger and Rainy Mountain.

Diversification Opportunities for Honey Badger and Rainy Mountain

-0.08

Correlation Coefficient

Honey Badger  Rainy Mountain

Good diversification

The 3 months correlation between Honey and Rainy is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Honey Badger Silver and Rainy Mountain Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainy Mountain Royalty and Honey Badger 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 Honey Badger Silver are associated (or correlated) with Rainy Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainy Mountain Royalty has no effect on the direction of Honey Badger i.e., Honey Badger and Rainy Mountain go up and down completely randomly.

Pair Corralation between Honey Badger and Rainy Mountain

Assuming the 90 days horizon Honey Badger Silver is expected to generate 1.85 times more return on investment than Rainy Mountain. However, Honey Badger is 1.85 times more volatile than Rainy Mountain Royalty. It trades about 0.22 of its potential returns per unit of risk. Rainy Mountain Royalty is currently generating about 0.21 per unit of risk. If you would invest  9.00  in Honey Badger Silver on August 18, 2024 and sell it today you would earn a total of  4.00  from holding Honey Badger Silver or generate 44.44% return on investment over 90 days.

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

Honey Badger Silver  vs.  Rainy Mountain Royalty

Honey Badger Silver

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Honey Badger Silver are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Honey Badger showed solid returns over the last few months and may actually be approaching a breakup point.

Rainy Mountain Royalty

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rainy Mountain Royalty are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Rainy Mountain is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Honey Badger and Rainy Mountain

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

The idea behind Honey Badger Silver and Rainy Mountain Royalty 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.