Correlation Between ARN Media and Duketon Mining
Can any of the company-specific risk be diversified away by investing in both ARN Media and Duketon Mining 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 ARN Media and Duketon Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARN Media Limited and Duketon Mining, you can compare the effects of market volatilities on ARN Media and Duketon Mining 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 ARN Media with a short position of Duketon Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARN Media and Duketon Mining.
Diversification Opportunities for ARN Media and Duketon Mining
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ARN and Duketon is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding ARN Media Limited and Duketon Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duketon Mining and ARN Media 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 ARN Media Limited are associated (or correlated) with Duketon Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duketon Mining has no effect on the direction of ARN Media i.e., ARN Media and Duketon Mining go up and down completely randomly.
Pair Corralation between ARN Media and Duketon Mining
Assuming the 90 days trading horizon ARN Media Limited is expected to under-perform the Duketon Mining. But the stock apears to be less risky and, when comparing its historical volatility, ARN Media Limited is 1.77 times less risky than Duketon Mining. The stock trades about -0.12 of its potential returns per unit of risk. The Duketon Mining is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Duketon Mining on October 31, 2024 and sell it today you would earn a total of 1.00 from holding Duketon Mining or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ARN Media Limited vs. Duketon Mining
Performance |
| Timeline |
| ARN Media Limited |
| Duketon Mining |
ARN Media and Duketon Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARN Media and Duketon Mining
The main advantage of trading using opposite ARN Media and Duketon Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARN Media position performs unexpectedly, Duketon Mining 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 Duketon Mining will offset losses from the drop in Duketon Mining's long position.| ARN Media vs. Great Southern Mining | ARN Media vs. Dexus Convenience Retail | ARN Media vs. Southern Hemisphere Mining | ARN Media vs. Ainsworth Game Technology |
| Duketon Mining vs. Super Retail Group | Duketon Mining vs. Aristocrat Leisure | Duketon Mining vs. Sky Metals | Duketon Mining vs. Viva Leisure |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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