Correlation Between Rio Tinto and StrikePoint Gold
Can any of the company-specific risk be diversified away by investing in both Rio Tinto and StrikePoint Gold 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 StrikePoint Gold 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 StrikePoint Gold, you can compare the effects of market volatilities on Rio Tinto and StrikePoint Gold 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 StrikePoint Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rio Tinto and StrikePoint Gold.
Diversification Opportunities for Rio Tinto and StrikePoint Gold
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rio and StrikePoint is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Rio Tinto ADR and StrikePoint Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StrikePoint Gold 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 StrikePoint Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StrikePoint Gold has no effect on the direction of Rio Tinto i.e., Rio Tinto and StrikePoint Gold go up and down completely randomly.
Pair Corralation between Rio Tinto and StrikePoint Gold
Considering the 90-day investment horizon Rio Tinto ADR is expected to generate 0.16 times more return on investment than StrikePoint Gold. However, Rio Tinto ADR is 6.42 times less risky than StrikePoint Gold. It trades about 0.29 of its potential returns per unit of risk. StrikePoint Gold is currently generating about -0.03 per unit of risk. If you would invest 6,700 in Rio Tinto ADR on October 9, 2025 and sell it today you would earn a total of 1,823 from holding Rio Tinto ADR or generate 27.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rio Tinto ADR vs. StrikePoint Gold
Performance |
| Timeline |
| Rio Tinto ADR |
| StrikePoint Gold |
Rio Tinto and StrikePoint Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rio Tinto and StrikePoint Gold
The main advantage of trading using opposite Rio Tinto and StrikePoint Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rio Tinto position performs unexpectedly, StrikePoint Gold 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 StrikePoint Gold will offset losses from the drop in StrikePoint Gold's long position.| Rio Tinto vs. Southern Copper | Rio Tinto vs. BHP Group Limited | Rio Tinto vs. Vale SA ADR | Rio Tinto vs. Newmont Goldcorp Corp |
| StrikePoint Gold vs. Prismo Metals | StrikePoint Gold vs. Jasper Mining | StrikePoint Gold vs. Freeport Resources | StrikePoint Gold vs. Grid Battery Metals |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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