Correlation Between De Grey and WW Grainger
Can any of the company-specific risk be diversified away by investing in both De Grey and WW Grainger 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 WW Grainger 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 WW Grainger, you can compare the effects of market volatilities on De Grey and WW Grainger 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 WW Grainger. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and WW Grainger.
Diversification Opportunities for De Grey and WW Grainger
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between DGD and GWW is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and WW Grainger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WW Grainger 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 WW Grainger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WW Grainger has no effect on the direction of De Grey i.e., De Grey and WW Grainger go up and down completely randomly.
Pair Corralation between De Grey and WW Grainger
Assuming the 90 days trading horizon De Grey Mining is expected to generate 1.51 times more return on investment than WW Grainger. However, De Grey is 1.51 times more volatile than WW Grainger. It trades about 0.25 of its potential returns per unit of risk. WW Grainger is currently generating about 0.19 per unit of risk. If you would invest 104.00 in De Grey Mining on November 2, 2024 and sell it today you would earn a total of 10.00 from holding De Grey Mining or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
De Grey Mining vs. WW Grainger
Performance |
| Timeline |
| De Grey Mining |
| WW Grainger |
De Grey and WW Grainger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and WW Grainger
The main advantage of trading using opposite De Grey and WW Grainger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, WW Grainger 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 WW Grainger will offset losses from the drop in WW Grainger's long position.| De Grey vs. PURE FOODS TASMANIA | De Grey vs. Molson Coors Beverage | De Grey vs. Eidesvik Offshore ASA | De Grey vs. Playtech plc |
| WW Grainger vs. EEDUCATION ALBERT AB | WW Grainger vs. CHINA EDUCATION GROUP | WW Grainger vs. Molina Healthcare | WW Grainger vs. Planet Fitness |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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