Correlation Between ACDC Metals and Sayona Mining
Can any of the company-specific risk be diversified away by investing in both ACDC Metals and Sayona 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 ACDC Metals and Sayona Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and Sayona Mining, you can compare the effects of market volatilities on ACDC Metals and Sayona 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 ACDC Metals with a short position of Sayona Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and Sayona Mining.
Diversification Opportunities for ACDC Metals and Sayona Mining
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ACDC and Sayona is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals and Sayona Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining and ACDC Metals 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 ACDC Metals are associated (or correlated) with Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining has no effect on the direction of ACDC Metals i.e., ACDC Metals and Sayona Mining go up and down completely randomly.
Pair Corralation between ACDC Metals and Sayona Mining
Assuming the 90 days trading horizon ACDC Metals is expected to generate 0.89 times more return on investment than Sayona Mining. However, ACDC Metals is 1.13 times less risky than Sayona Mining. It trades about -0.03 of its potential returns per unit of risk. Sayona Mining is currently generating about -0.06 per unit of risk. If you would invest 18.00 in ACDC Metals on October 27, 2024 and sell it today you would lose (12.70) from holding ACDC Metals or give up 70.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACDC Metals vs. Sayona Mining
Performance |
| Timeline |
| ACDC Metals |
| Sayona Mining |
ACDC Metals and Sayona Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and Sayona Mining
The main advantage of trading using opposite ACDC Metals and Sayona Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals position performs unexpectedly, Sayona 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 Sayona Mining will offset losses from the drop in Sayona Mining's long position.| ACDC Metals vs. MetalsGrove Mining | ACDC Metals vs. FireFly Metals | ACDC Metals vs. Group 6 Metals | ACDC Metals vs. Sky Metals |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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