Correlation Between De Grey and Metals Acquisition
Can any of the company-specific risk be diversified away by investing in both De Grey and Metals Acquisition 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 Metals Acquisition 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 Metals Acquisition Limited, you can compare the effects of market volatilities on De Grey and Metals Acquisition 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 Metals Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Metals Acquisition.
Diversification Opportunities for De Grey and Metals Acquisition
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DEG and Metals is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Metals Acquisition Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Acquisition 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 Metals Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Acquisition has no effect on the direction of De Grey i.e., De Grey and Metals Acquisition go up and down completely randomly.
Pair Corralation between De Grey and Metals Acquisition
Assuming the 90 days trading horizon De Grey Mining is expected to generate 1.16 times more return on investment than Metals Acquisition. However, De Grey is 1.16 times more volatile than Metals Acquisition Limited. It trades about 0.03 of its potential returns per unit of risk. Metals Acquisition Limited is currently generating about -0.14 per unit of risk. If you would invest 195.00 in De Grey Mining on December 1, 2024 and sell it today you would earn a total of 2.00 from holding De Grey Mining or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
De Grey Mining vs. Metals Acquisition Limited
Performance |
| Timeline |
| De Grey Mining |
| Metals Acquisition |
De Grey and Metals Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Metals Acquisition
The main advantage of trading using opposite De Grey and Metals Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Metals Acquisition 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 Metals Acquisition will offset losses from the drop in Metals Acquisition's long position.| De Grey vs. Sports Entertainment Group | De Grey vs. Pinnacle Investment Management | De Grey vs. Autosports Group | De Grey vs. Hotel Property Investments |
| Metals Acquisition vs. Skycity Entertainment Group | Metals Acquisition vs. Perseus Mining | Metals Acquisition vs. Truscott Mining Corp | Metals Acquisition vs. Seven West Media |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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