Correlation Between Carawine Resources and Anax Metals
Can any of the company-specific risk be diversified away by investing in both Carawine Resources and Anax Metals 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 Carawine Resources and Anax Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carawine Resources Limited and Anax Metals, you can compare the effects of market volatilities on Carawine Resources and Anax Metals 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 Carawine Resources with a short position of Anax Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carawine Resources and Anax Metals.
Diversification Opportunities for Carawine Resources and Anax Metals
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carawine and Anax is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Carawine Resources Limited and Anax Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anax Metals and Carawine Resources 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 Carawine Resources Limited are associated (or correlated) with Anax Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anax Metals has no effect on the direction of Carawine Resources i.e., Carawine Resources and Anax Metals go up and down completely randomly.
Pair Corralation between Carawine Resources and Anax Metals
Assuming the 90 days trading horizon Carawine Resources Limited is expected to generate 0.49 times more return on investment than Anax Metals. However, Carawine Resources Limited is 2.04 times less risky than Anax Metals. It trades about 0.01 of its potential returns per unit of risk. Anax Metals is currently generating about -0.15 per unit of risk. If you would invest 11.00 in Carawine Resources Limited on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Carawine Resources Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carawine Resources Limited vs. Anax Metals
Performance |
| Timeline |
| Carawine Resources |
| Anax Metals |
Carawine Resources and Anax Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carawine Resources and Anax Metals
The main advantage of trading using opposite Carawine Resources and Anax Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carawine Resources position performs unexpectedly, Anax Metals 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 Anax Metals will offset losses from the drop in Anax Metals' long position.| Carawine Resources vs. Northern Star Resources | Carawine Resources vs. Evolution Mining | Carawine Resources vs. Bluescope Steel | Carawine Resources vs. Sandfire Resources NL |
| Anax Metals vs. Truscott Mining Corp | Anax Metals vs. Richmond Vanadium Technology | Anax Metals vs. Green Technology Metals | Anax Metals vs. Ainsworth Game Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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