Correlation Between Champion Iron and SPDR SPASX
Can any of the company-specific risk be diversified away by investing in both Champion Iron and SPDR SPASX 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 Champion Iron and SPDR SPASX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and SPDR SPASX 200, you can compare the effects of market volatilities on Champion Iron and SPDR SPASX 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 Champion Iron with a short position of SPDR SPASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and SPDR SPASX.
Diversification Opportunities for Champion Iron and SPDR SPASX
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Champion and SPDR is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and SPDR SPASX 200 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SPASX 200 and Champion Iron 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 Champion Iron are associated (or correlated) with SPDR SPASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SPASX 200 has no effect on the direction of Champion Iron i.e., Champion Iron and SPDR SPASX go up and down completely randomly.
Pair Corralation between Champion Iron and SPDR SPASX
Assuming the 90 days trading horizon Champion Iron is expected to under-perform the SPDR SPASX. In addition to that, Champion Iron is 3.4 times more volatile than SPDR SPASX 200. It trades about -0.01 of its total potential returns per unit of risk. SPDR SPASX 200 is currently generating about 0.11 per unit of volatility. If you would invest 2,422 in SPDR SPASX 200 on September 3, 2024 and sell it today you would earn a total of 277.00 from holding SPDR SPASX 200 or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Iron vs. SPDR SPASX 200
Performance |
| Timeline |
| Champion Iron |
| SPDR SPASX 200 |
Champion Iron and SPDR SPASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and SPDR SPASX
The main advantage of trading using opposite Champion Iron and SPDR SPASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron position performs unexpectedly, SPDR SPASX 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 SPDR SPASX will offset losses from the drop in SPDR SPASX's long position.| Champion Iron vs. Northern Star Resources | Champion Iron vs. Evolution Mining | Champion Iron vs. Bluescope Steel | Champion Iron vs. Aneka Tambang Tbk |
| SPDR SPASX vs. SPDR SPASX 200 | SPDR SPASX vs. SPDR SPASX 50 | SPDR SPASX vs. SPDR MSCI World | SPDR SPASX vs. SPDR Dow Jones |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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