Correlation Between Rimfire Pacific and Middle Island
Can any of the company-specific risk be diversified away by investing in both Rimfire Pacific and Middle Island 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 Rimfire Pacific and Middle Island into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rimfire Pacific Mining and Middle Island Resources, you can compare the effects of market volatilities on Rimfire Pacific and Middle Island 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 Rimfire Pacific with a short position of Middle Island. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rimfire Pacific and Middle Island.
Diversification Opportunities for Rimfire Pacific and Middle Island
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rimfire and Middle is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Rimfire Pacific Mining and Middle Island Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Middle Island Resources and Rimfire Pacific 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 Rimfire Pacific Mining are associated (or correlated) with Middle Island. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Middle Island Resources has no effect on the direction of Rimfire Pacific i.e., Rimfire Pacific and Middle Island go up and down completely randomly.
Pair Corralation between Rimfire Pacific and Middle Island
Assuming the 90 days trading horizon Rimfire Pacific Mining is expected to generate 1.29 times more return on investment than Middle Island. However, Rimfire Pacific is 1.29 times more volatile than Middle Island Resources. It trades about 0.07 of its potential returns per unit of risk. Middle Island Resources is currently generating about -0.06 per unit of risk. If you would invest 1.20 in Rimfire Pacific Mining on September 8, 2025 and sell it today you would earn a total of 0.20 from holding Rimfire Pacific Mining or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rimfire Pacific Mining vs. Middle Island Resources
Performance |
| Timeline |
| Rimfire Pacific Mining |
| Middle Island Resources |
Rimfire Pacific and Middle Island Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rimfire Pacific and Middle Island
The main advantage of trading using opposite Rimfire Pacific and Middle Island positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rimfire Pacific position performs unexpectedly, Middle Island 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 Middle Island will offset losses from the drop in Middle Island's long position.| Rimfire Pacific vs. Northern Star Resources | Rimfire Pacific vs. Evolution Mining | Rimfire Pacific vs. Alcoa | Rimfire Pacific vs. Bluescope Steel |
| Middle Island vs. Bluescope Steel | Middle Island vs. Champion Iron | Middle Island vs. Magellan Financial Group | Middle Island vs. WT Financial Group |
Check out your portfolio center.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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