Correlation Between De Grey and Lykos Metals
Can any of the company-specific risk be diversified away by investing in both De Grey and Lykos 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 Lykos 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 Lykos Metals, you can compare the effects of market volatilities on De Grey and Lykos 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 Lykos Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Lykos Metals.
Diversification Opportunities for De Grey and Lykos Metals
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DEG and Lykos is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Lykos Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lykos 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 Lykos Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lykos Metals has no effect on the direction of De Grey i.e., De Grey and Lykos Metals go up and down completely randomly.
Pair Corralation between De Grey and Lykos Metals
Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.56 times more return on investment than Lykos Metals. However, De Grey Mining is 1.78 times less risky than Lykos Metals. It trades about 0.07 of its potential returns per unit of risk. Lykos Metals is currently generating about -0.07 per unit of risk. If you would invest 125.00 in De Grey Mining on October 26, 2024 and sell it today you would earn a total of 76.00 from holding De Grey Mining or generate 60.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Lykos Metals
Performance |
| Timeline |
| De Grey Mining |
| Lykos Metals |
De Grey and Lykos Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Lykos Metals
The main advantage of trading using opposite De Grey and Lykos Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Lykos 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 Lykos Metals will offset losses from the drop in Lykos Metals' long position.| De Grey vs. Ambertech | De Grey vs. WiseTech Global Limited | De Grey vs. Dug Technology | De Grey vs. Macquarie Technology Group |
| Lykos Metals vs. Northern Star Resources | Lykos Metals vs. Evolution Mining | Lykos Metals vs. Bluescope Steel | Lykos 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 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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