Correlation Between SPASX Dividend and Sandfire Resources
Can any of the company-specific risk be diversified away by investing in both SPASX Dividend and Sandfire Resources 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 SPASX Dividend and Sandfire Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPASX Dividend Opportunities and Sandfire Resources NL, you can compare the effects of market volatilities on SPASX Dividend and Sandfire Resources 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 SPASX Dividend with a short position of Sandfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPASX Dividend and Sandfire Resources.
Diversification Opportunities for SPASX Dividend and Sandfire Resources
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPASX and Sandfire is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding SPASX Dividend Opportunities and Sandfire Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandfire Resources and SPASX Dividend 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 SPASX Dividend Opportunities are associated (or correlated) with Sandfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandfire Resources has no effect on the direction of SPASX Dividend i.e., SPASX Dividend and Sandfire Resources go up and down completely randomly.
Pair Corralation between SPASX Dividend and Sandfire Resources
Assuming the 90 days trading horizon SPASX Dividend is expected to generate 4.78 times less return on investment than Sandfire Resources. But when comparing it to its historical volatility, SPASX Dividend Opportunities is 3.01 times less risky than Sandfire Resources. It trades about 0.03 of its potential returns per unit of risk. Sandfire Resources NL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 925.00 in Sandfire Resources NL on August 29, 2024 and sell it today you would earn a total of 92.00 from holding Sandfire Resources NL or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPASX Dividend Opportunities vs. Sandfire Resources NL
Performance |
| Timeline |
SPASX Dividend and Sandfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
SPASX Dividend Opportunities
Pair trading matchups for SPASX Dividend
Sandfire Resources NL
Pair trading matchups for Sandfire Resources
Pair Trading with SPASX Dividend and Sandfire Resources
The main advantage of trading using opposite SPASX Dividend and Sandfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPASX Dividend position performs unexpectedly, Sandfire Resources 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 Sandfire Resources will offset losses from the drop in Sandfire Resources' long position.| SPASX Dividend vs. Red Hill Iron | SPASX Dividend vs. Ainsworth Game Technology | SPASX Dividend vs. Champion Iron | SPASX Dividend vs. Autosports Group |
| Sandfire Resources vs. Dexus Convenience Retail | Sandfire Resources vs. Collins Foods | Sandfire Resources vs. ABACUS STORAGE KING | Sandfire Resources vs. Genetic Technologies |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |