Correlation Between De Grey and Anax Metals
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and Anax Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and Anax Metals, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of Anax Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Anax Metals.
Diversification Opportunities for De Grey and Anax Metals
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between DEG and Anax is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Anax Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anax Metals and De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and Anax Metals go up and down completely randomly.
Pair Corralation between De Grey and Anax Metals
Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.2 times more return on investment than Anax Metals. However, De Grey Mining is 4.93 times less risky than Anax Metals. It trades about 0.32 of its potential returns per unit of risk. Anax Metals is currently generating about -0.07 per unit of risk. If you would invest 179.00 in De Grey Mining on November 2, 2024 and sell it today you would earn a total of 16.00 from holding De Grey Mining or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Anax Metals
Performance |
| Timeline |
| De Grey Mining |
| Anax Metals |
De Grey and Anax Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Anax Metals
The main advantage of trading using opposite De Grey and Anax Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.The idea behind De Grey Mining and Anax Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Anax Metals vs. BSP Financial Group | Anax Metals vs. Kkr Credit Income | Anax Metals vs. Sequoia Financial Group | Anax Metals vs. National Australia Bank |
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 Stocks Directory module to find actively traded stocks across global markets.
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