Correlation Between Andean Silver and De Grey
Can any of the company-specific risk be diversified away by investing in both Andean Silver 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 Andean Silver and De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andean Silver Limited and De Grey Mining, you can compare the effects of market volatilities on Andean Silver 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 Andean Silver with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andean Silver and De Grey.
Diversification Opportunities for Andean Silver and De Grey
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Andean and DEG is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Andean Silver Limited 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 Andean Silver 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 Andean Silver Limited 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 Andean Silver i.e., Andean Silver and De Grey go up and down completely randomly.
Pair Corralation between Andean Silver and De Grey
Assuming the 90 days trading horizon Andean Silver Limited is expected to under-perform the De Grey. In addition to that, Andean Silver is 1.64 times more volatile than De Grey Mining. It trades about -0.32 of its total potential returns per unit of risk. De Grey Mining is currently generating about 0.0 per unit of volatility. If you would invest 153.00 in De Grey Mining on September 1, 2024 and sell it today you would lose (1.00) from holding De Grey Mining or give up 0.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Andean Silver Limited vs. De Grey Mining
Performance |
| Timeline |
| Andean Silver Limited |
| De Grey Mining |
Andean Silver and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andean Silver and De Grey
The main advantage of trading using opposite Andean Silver and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andean Silver 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.| Andean Silver vs. Northern Star Resources | Andean Silver vs. Evolution Mining | Andean Silver vs. Bluescope Steel | Andean Silver vs. Sandfire Resources NL |
| De Grey vs. Diversified United Investment | De Grey vs. Epsilon Healthcare | De Grey vs. Health and Plant | De Grey vs. Global Health |
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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