Correlation Between Winsome Resources and Savannah Resources

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

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

Diversification Opportunities for Winsome Resources and Savannah Resources

-0.38

Correlation Coefficient

Winsome Resources  Savannah Resources

Very good diversification

The 3 months correlation between Winsome and Savannah is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Winsome Resources Limited and Savannah Resources Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savannah Resources Plc and Winsome 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 Winsome Resources Limited are associated (or correlated) with Savannah Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savannah Resources Plc has no effect on the direction of Winsome Resources i.e., Winsome Resources and Savannah Resources go up and down completely randomly.

Pair Corralation between Winsome Resources and Savannah Resources

Assuming the 90 days horizon Winsome Resources Limited is expected to generate 2.5 times more return on investment than Savannah Resources. However, Winsome Resources is 2.5 times more volatile than Savannah Resources Plc. It trades about 0.1 of its potential returns per unit of risk. Savannah Resources Plc is currently generating about -0.08 per unit of risk. If you would invest  8.08  in Winsome Resources Limited on May 7, 2025 and sell it today you would earn a total of  3.92  from holding Winsome Resources Limited or generate 48.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Winsome Resources Limited  vs.  Savannah Resources Plc

Winsome Resources

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Winsome Resources Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Winsome Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Savannah Resources Plc

Risk-Adjusted Performance

Weakest

Over the last 90 days Savannah Resources Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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 Winsome Resources and Savannah Resources

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

The idea behind Winsome Resources Limited and Savannah Resources Plc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..