Correlation Between De Grey and HOKURIKU
Can any of the company-specific risk be diversified away by investing in both De Grey and HOKURIKU 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 HOKURIKU 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 HOKURIKU EL PWR, you can compare the effects of market volatilities on De Grey and HOKURIKU 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 HOKURIKU. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and HOKURIKU.
Diversification Opportunities for De Grey and HOKURIKU
Very good diversification
The 3 months correlation between DGD and HOKURIKU is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and HOKURIKU EL PWR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOKURIKU EL PWR 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 HOKURIKU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOKURIKU EL PWR has no effect on the direction of De Grey i.e., De Grey and HOKURIKU go up and down completely randomly.
Pair Corralation between De Grey and HOKURIKU
Assuming the 90 days trading horizon De Grey Mining is expected to generate 1.06 times more return on investment than HOKURIKU. However, De Grey is 1.06 times more volatile than HOKURIKU EL PWR. It trades about 0.53 of its potential returns per unit of risk. HOKURIKU EL PWR is currently generating about -0.28 per unit of risk. If you would invest 104.00 in De Grey Mining on October 25, 2024 and sell it today you would earn a total of 15.00 from holding De Grey Mining or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
De Grey Mining vs. HOKURIKU EL PWR
Performance |
| Timeline |
| De Grey Mining |
| HOKURIKU EL PWR |
De Grey and HOKURIKU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and HOKURIKU
The main advantage of trading using opposite De Grey and HOKURIKU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, HOKURIKU 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 HOKURIKU will offset losses from the drop in HOKURIKU's long position.| De Grey vs. VIENNA INSURANCE GR | De Grey vs. Japan Post Insurance | De Grey vs. Safety Insurance Group | De Grey vs. UNIQA INSURANCE GR |
| HOKURIKU vs. CHRYSALIS INVESTMENTS LTD | HOKURIKU vs. Applied Materials | HOKURIKU vs. Rayonier Advanced Materials | HOKURIKU vs. ULTRA CLEAN HLDGS |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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