Correlation Between Altura Mining and South Star
Can any of the company-specific risk be diversified away by investing in both Altura Mining and South Star 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 Altura Mining and South Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altura Mining Limited and South Star Battery, you can compare the effects of market volatilities on Altura Mining and South Star 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 Altura Mining with a short position of South Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altura Mining and South Star.
Diversification Opportunities for Altura Mining and South Star
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Altura and South is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Altura Mining Limited and South Star Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Star Battery and Altura Mining 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 Altura Mining Limited are associated (or correlated) with South Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Star Battery has no effect on the direction of Altura Mining i.e., Altura Mining and South Star go up and down completely randomly.
Pair Corralation between Altura Mining and South Star
Assuming the 90 days horizon Altura Mining Limited is expected to under-perform the South Star. In addition to that, Altura Mining is 2.98 times more volatile than South Star Battery. It trades about -0.19 of its total potential returns per unit of risk. South Star Battery is currently generating about -0.09 per unit of volatility. If you would invest 44.00 in South Star Battery on September 1, 2024 and sell it today you would lose (5.00) from holding South Star Battery or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Altura Mining Limited vs. South Star Battery
Performance |
| Timeline |
| Altura Mining Limited |
| South Star Battery |
Altura Mining and South Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altura Mining and South Star
The main advantage of trading using opposite Altura Mining and South Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altura Mining position performs unexpectedly, South Star 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 South Star will offset losses from the drop in South Star's long position.| Altura Mining vs. Liontown Resources Limited | Altura Mining vs. ATT Inc | Altura Mining vs. Merck Company | Altura Mining vs. Walt Disney |
| South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Qubec Nickel Corp | South Star vs. Rockridge Resources |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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