Correlation Between De Grey and Tombador Iron
Can any of the company-specific risk be diversified away by investing in both De Grey and Tombador Iron 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 Tombador Iron 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 Tombador Iron, you can compare the effects of market volatilities on De Grey and Tombador Iron 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 Tombador Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Tombador Iron.
Diversification Opportunities for De Grey and Tombador Iron
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DEG and Tombador is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Tombador Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tombador Iron 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 Tombador Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tombador Iron has no effect on the direction of De Grey i.e., De Grey and Tombador Iron go up and down completely randomly.
Pair Corralation between De Grey and Tombador Iron
Assuming the 90 days trading horizon De Grey is expected to generate 49.81 times less return on investment than Tombador Iron. But when comparing it to its historical volatility, De Grey Mining is 25.87 times less risky than Tombador Iron. It trades about 0.03 of its potential returns per unit of risk. Tombador Iron is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.40 in Tombador Iron on September 2, 2024 and sell it today you would earn a total of 33.60 from holding Tombador Iron or generate 2400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Tombador Iron
Performance |
| Timeline |
| De Grey Mining |
| Tombador Iron |
De Grey and Tombador Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Tombador Iron
The main advantage of trading using opposite De Grey and Tombador Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Tombador Iron 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 Tombador Iron will offset losses from the drop in Tombador Iron'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 |
| Tombador Iron vs. Northern Star Resources | Tombador Iron vs. Evolution Mining | Tombador Iron vs. Sandfire Resources NL | Tombador Iron vs. Aneka Tambang Tbk |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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