Correlation Between De Grey and Australian Strategic
Can any of the company-specific risk be diversified away by investing in both De Grey and Australian Strategic 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 Australian Strategic 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 Australian Strategic Materials, you can compare the effects of market volatilities on De Grey and Australian Strategic 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 Australian Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Australian Strategic.
Diversification Opportunities for De Grey and Australian Strategic
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DEG and Australian is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Australian Strategic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Strategic 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 Australian Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Strategic has no effect on the direction of De Grey i.e., De Grey and Australian Strategic go up and down completely randomly.
Pair Corralation between De Grey and Australian Strategic
Assuming the 90 days trading horizon De Grey Mining is expected to under-perform the Australian Strategic. But the stock apears to be less risky and, when comparing its historical volatility, De Grey Mining is 1.47 times less risky than Australian Strategic. The stock trades about -0.08 of its potential returns per unit of risk. The Australian Strategic Materials is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Australian Strategic Materials on October 11, 2024 and sell it today you would earn a total of 0.00 from holding Australian Strategic Materials or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Australian Strategic Materials
Performance |
| Timeline |
| De Grey Mining |
| Australian Strategic |
De Grey and Australian Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Australian Strategic
The main advantage of trading using opposite De Grey and Australian Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Australian Strategic 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 Australian Strategic will offset losses from the drop in Australian Strategic's long position.| De Grey vs. Healthco Healthcare and | De Grey vs. Microequities Asset Management | De Grey vs. Aeris Environmental | De Grey vs. BKI Investment |
| Australian Strategic vs. Northern Star Resources | Australian Strategic vs. Evolution Mining | Australian Strategic vs. Bluescope Steel | Australian Strategic vs. De Grey 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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