Correlation Between De Grey and Hawsons Iron
Can any of the company-specific risk be diversified away by investing in both De Grey and Hawsons Iron 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 Hawsons Iron 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 Hawsons Iron, you can compare the effects of market volatilities on De Grey and Hawsons Iron 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 Hawsons Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Hawsons Iron.
Diversification Opportunities for De Grey and Hawsons Iron
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DEG and Hawsons is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Hawsons Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawsons Iron 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 Hawsons Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawsons Iron has no effect on the direction of De Grey i.e., De Grey and Hawsons Iron go up and down completely randomly.
Pair Corralation between De Grey and Hawsons Iron
Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.2 times more return on investment than Hawsons Iron. However, De Grey Mining is 5.04 times less risky than Hawsons Iron. It trades about 0.41 of its potential returns per unit of risk. Hawsons Iron is currently generating about -0.01 per unit of risk. If you would invest 180.00 in De Grey Mining on October 24, 2024 and sell it today you would earn a total of 20.00 from holding De Grey Mining or generate 11.11% 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. Hawsons Iron
Performance |
| Timeline |
| De Grey Mining |
| Hawsons Iron |
De Grey and Hawsons Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Hawsons Iron
The main advantage of trading using opposite De Grey and Hawsons Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Hawsons Iron 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 Hawsons Iron will offset losses from the drop in Hawsons Iron's long position.| De Grey vs. Genetic Technologies | De Grey vs. Readytech Holdings | De Grey vs. Pure Foods Tasmania | De Grey vs. Collins Foods |
| Hawsons Iron vs. Clime Investment Management | Hawsons Iron vs. Hutchison Telecommunications | Hawsons Iron vs. Epsilon Healthcare | Hawsons Iron vs. Argo Investments |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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