Correlation Between De Grey and Lindian Resources
Can any of the company-specific risk be diversified away by investing in both De Grey and Lindian Resources 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 Lindian Resources 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 Lindian Resources, you can compare the effects of market volatilities on De Grey and Lindian Resources 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 Lindian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Lindian Resources.
Diversification Opportunities for De Grey and Lindian Resources
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DEG and Lindian is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Lindian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindian Resources 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 Lindian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindian Resources has no effect on the direction of De Grey i.e., De Grey and Lindian Resources go up and down completely randomly.
Pair Corralation between De Grey and Lindian Resources
Assuming the 90 days trading horizon De Grey Mining is expected to generate 1.02 times more return on investment than Lindian Resources. However, De Grey is 1.02 times more volatile than Lindian Resources. It trades about 0.14 of its potential returns per unit of risk. Lindian Resources is currently generating about 0.01 per unit of risk. If you would invest 145.00 in De Grey Mining on October 20, 2024 and sell it today you would earn a total of 56.00 from holding De Grey Mining or generate 38.62% 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. Lindian Resources
Performance |
| Timeline |
| De Grey Mining |
| Lindian Resources |
De Grey and Lindian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Lindian Resources
The main advantage of trading using opposite De Grey and Lindian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Lindian Resources 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 Lindian Resources will offset losses from the drop in Lindian Resources' long position.| De Grey vs. Firstwave Cloud Technology | De Grey vs. National Australia Bank | De Grey vs. Australian Strategic Materials | De Grey vs. Insignia Financial |
| Lindian Resources vs. Black Rock Mining | Lindian Resources vs. Aeon Metals | Lindian Resources vs. Hammer Metals | Lindian Resources vs. 29Metals |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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