Correlation Between Rio Tinto and Straits Trading
Can any of the company-specific risk be diversified away by investing in both Rio Tinto and Straits Trading 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 Straits Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rio Tinto Group and Straits Trading, you can compare the effects of market volatilities on Rio Tinto and Straits Trading 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 Straits Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rio Tinto and Straits Trading.
Diversification Opportunities for Rio Tinto and Straits Trading
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rio and Straits is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Rio Tinto Group and Straits Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straits Trading 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 Group are associated (or correlated) with Straits Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straits Trading has no effect on the direction of Rio Tinto i.e., Rio Tinto and Straits Trading go up and down completely randomly.
Pair Corralation between Rio Tinto and Straits Trading
If you would invest 7,923 in Rio Tinto Group on September 11, 2025 and sell it today you would earn a total of 1,136 from holding Rio Tinto Group or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Rio Tinto Group vs. Straits Trading
Performance |
| Timeline |
| Rio Tinto Group |
| Straits Trading |
Rio Tinto and Straits Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rio Tinto and Straits Trading
The main advantage of trading using opposite Rio Tinto and Straits Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rio Tinto position performs unexpectedly, Straits Trading 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 Straits Trading will offset losses from the drop in Straits Trading's long position.| Rio Tinto vs. BHP Group Limited | Rio Tinto vs. China Zhong Qi | Rio Tinto vs. Grupo Mxico SAB | Rio Tinto vs. Zijin Mining Group |
| Straits Trading vs. PSRHF | Straits Trading vs. Nyrstar NV ADR | Straits Trading vs. Surge Battery Metals | Straits Trading vs. E3 Metals Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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