Correlation Between De Grey and Horseshoe Metals
Can any of the company-specific risk be diversified away by investing in both De Grey and Horseshoe 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 Horseshoe 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 Horseshoe Metals, you can compare the effects of market volatilities on De Grey and Horseshoe 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 Horseshoe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Horseshoe Metals.
Diversification Opportunities for De Grey and Horseshoe Metals
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DEG and Horseshoe is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Horseshoe Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horseshoe 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 Horseshoe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horseshoe Metals has no effect on the direction of De Grey i.e., De Grey and Horseshoe Metals go up and down completely randomly.
Pair Corralation between De Grey and Horseshoe Metals
Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.65 times more return on investment than Horseshoe Metals. However, De Grey Mining is 1.54 times less risky than Horseshoe Metals. It trades about 0.05 of its potential returns per unit of risk. Horseshoe Metals is currently generating about -0.1 per unit of risk. If you would invest 145.00 in De Grey Mining on August 29, 2024 and sell it today you would earn a total of 3.00 from holding De Grey Mining or generate 2.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
De Grey Mining vs. Horseshoe Metals
Performance |
| Timeline |
| De Grey Mining |
| Horseshoe Metals |
De Grey and Horseshoe Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Horseshoe Metals
The main advantage of trading using opposite De Grey and Horseshoe Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Horseshoe 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 Horseshoe Metals will offset losses from the drop in Horseshoe Metals' long position.| De Grey vs. oOhMedia | De Grey vs. Ainsworth Game Technology | De Grey vs. Mayfield Childcare | De Grey vs. Skycity Entertainment Group |
| Horseshoe Metals vs. Northern Star Resources | Horseshoe Metals vs. Evolution Mining | Horseshoe Metals vs. Bluescope Steel | Horseshoe Metals vs. Sandfire Resources NL |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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