Correlation Between De Grey and Hammer Metals
Can any of the company-specific risk be diversified away by investing in both De Grey and Hammer 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 Hammer 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 Hammer Metals, you can compare the effects of market volatilities on De Grey and Hammer 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 Hammer Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Hammer Metals.
Diversification Opportunities for De Grey and Hammer Metals
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DEG and Hammer is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Hammer Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammer 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 Hammer Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammer Metals has no effect on the direction of De Grey i.e., De Grey and Hammer Metals go up and down completely randomly.
Pair Corralation between De Grey and Hammer Metals
Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.76 times more return on investment than Hammer Metals. However, De Grey Mining is 1.31 times less risky than Hammer Metals. It trades about 0.15 of its potential returns per unit of risk. Hammer Metals is currently generating about 0.03 per unit of risk. If you would invest 105.00 in De Grey Mining on October 17, 2024 and sell it today you would earn a total of 93.00 from holding De Grey Mining or generate 88.57% 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. Hammer Metals
Performance |
| Timeline |
| De Grey Mining |
| Hammer Metals |
De Grey and Hammer Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Hammer Metals
The main advantage of trading using opposite De Grey and Hammer Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Hammer 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 Hammer Metals will offset losses from the drop in Hammer Metals' long position.| De Grey vs. Torque Metals | De Grey vs. Dalaroo Metals | De Grey vs. Dexus Convenience Retail | De Grey vs. Sky Metals |
| Hammer Metals vs. Northern Star Resources | Hammer Metals vs. Evolution Mining | Hammer Metals vs. Bluescope Steel | Hammer Metals 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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