Correlation Between De Grey and Kingsgate Consolidated
Can any of the company-specific risk be diversified away by investing in both De Grey and Kingsgate Consolidated 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 Kingsgate Consolidated 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 Kingsgate Consolidated, you can compare the effects of market volatilities on De Grey and Kingsgate Consolidated 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 Kingsgate Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Kingsgate Consolidated.
Diversification Opportunities for De Grey and Kingsgate Consolidated
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DEG and Kingsgate is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Kingsgate Consolidated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsgate Consolidated 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 Kingsgate Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsgate Consolidated has no effect on the direction of De Grey i.e., De Grey and Kingsgate Consolidated go up and down completely randomly.
Pair Corralation between De Grey and Kingsgate Consolidated
Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.74 times more return on investment than Kingsgate Consolidated. However, De Grey Mining is 1.35 times less risky than Kingsgate Consolidated. It trades about 0.03 of its potential returns per unit of risk. Kingsgate Consolidated is currently generating about 0.02 per unit of risk. If you would invest 134.00 in De Grey Mining on September 2, 2024 and sell it today you would earn a total of 18.00 from holding De Grey Mining or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Kingsgate Consolidated
Performance |
| Timeline |
| De Grey Mining |
| Kingsgate Consolidated |
De Grey and Kingsgate Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Kingsgate Consolidated
The main advantage of trading using opposite De Grey and Kingsgate Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Kingsgate Consolidated 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 Kingsgate Consolidated will offset losses from the drop in Kingsgate Consolidated's long position.| De Grey vs. Microequities Asset Management | De Grey vs. Regal Funds Management | De Grey vs. Platinum Asia Investments | De Grey vs. REGAL ASIAN INVESTMENTS |
| Kingsgate Consolidated vs. Credit Clear | Kingsgate Consolidated vs. Computershare | Kingsgate Consolidated vs. Commonwealth Bank of | Kingsgate Consolidated vs. Wt Financial Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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