Correlation Between NEW MILLENNIUM and De Grey
Can any of the company-specific risk be diversified away by investing in both NEW MILLENNIUM and De Grey 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 NEW MILLENNIUM and De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW MILLENNIUM IRON and De Grey Mining, you can compare the effects of market volatilities on NEW MILLENNIUM and De Grey 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 NEW MILLENNIUM with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW MILLENNIUM and De Grey.
Diversification Opportunities for NEW MILLENNIUM and De Grey
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between NEW and DGD is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NEW MILLENNIUM IRON and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining and NEW MILLENNIUM 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 NEW MILLENNIUM IRON are associated (or correlated) with De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of NEW MILLENNIUM i.e., NEW MILLENNIUM and De Grey go up and down completely randomly.
Pair Corralation between NEW MILLENNIUM and De Grey
Assuming the 90 days trading horizon NEW MILLENNIUM is expected to generate 6.42 times less return on investment than De Grey. In addition to that, NEW MILLENNIUM is 1.54 times more volatile than De Grey Mining. It trades about 0.04 of its total potential returns per unit of risk. De Grey Mining is currently generating about 0.4 per unit of volatility. If you would invest 106.00 in De Grey Mining on October 29, 2024 and sell it today you would earn a total of 13.00 from holding De Grey Mining or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW MILLENNIUM IRON vs. De Grey Mining
Performance |
| Timeline |
| NEW MILLENNIUM IRON |
| De Grey Mining |
NEW MILLENNIUM and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW MILLENNIUM and De Grey
The main advantage of trading using opposite NEW MILLENNIUM and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW MILLENNIUM position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey's long position.| NEW MILLENNIUM vs. Nucletron Electronic Aktiengesellschaft | NEW MILLENNIUM vs. PULSION Medical Systems | NEW MILLENNIUM vs. Genertec Universal Medical | NEW MILLENNIUM vs. CREO MEDICAL GRP |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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