Correlation Between Centaurus Metals and De Grey
Can any of the company-specific risk be diversified away by investing in both Centaurus Metals 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 Centaurus Metals and De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaurus Metals and De Grey Mining, you can compare the effects of market volatilities on Centaurus Metals 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 Centaurus Metals with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaurus Metals and De Grey.
Diversification Opportunities for Centaurus Metals and De Grey
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centaurus and DEG is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Centaurus Metals 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 Centaurus 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 Centaurus Metals 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 Centaurus Metals i.e., Centaurus Metals and De Grey go up and down completely randomly.
Pair Corralation between Centaurus Metals and De Grey
Assuming the 90 days trading horizon Centaurus Metals is expected to under-perform the De Grey. But the stock apears to be less risky and, when comparing its historical volatility, Centaurus Metals is 1.23 times less risky than De Grey. The stock trades about -0.15 of its potential returns per unit of risk. The De Grey Mining is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 145.00 in De Grey Mining on September 19, 2024 and sell it today you would earn a total of 40.00 from holding De Grey Mining or generate 27.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaurus Metals vs. De Grey Mining
Performance |
| Timeline |
| Centaurus Metals |
| De Grey Mining |
Centaurus Metals and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaurus Metals and De Grey
The main advantage of trading using opposite Centaurus Metals and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaurus Metals 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.| Centaurus Metals vs. Northern Star Resources | Centaurus Metals vs. Evolution Mining | Centaurus Metals vs. Bluescope Steel | Centaurus Metals vs. Sandfire Resources NL |
| De Grey vs. Sky Metals | De Grey vs. Computershare | De Grey vs. Centaurus Metals | De Grey vs. MetalsGrove Mining |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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