Correlation Between De Grey and Power Assets
Can any of the company-specific risk be diversified away by investing in both De Grey and Power Assets 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 Power Assets 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 Power Assets Holdings, you can compare the effects of market volatilities on De Grey and Power Assets 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 Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Power Assets.
Diversification Opportunities for De Grey and Power Assets
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DGD and Power is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings 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 Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of De Grey i.e., De Grey and Power Assets go up and down completely randomly.
Pair Corralation between De Grey and Power Assets
Assuming the 90 days trading horizon De Grey Mining is expected to generate 1.79 times more return on investment than Power Assets. However, De Grey is 1.79 times more volatile than Power Assets Holdings. It trades about 0.27 of its potential returns per unit of risk. Power Assets Holdings is currently generating about -0.27 per unit of risk. If you would invest 108.00 in De Grey Mining on November 6, 2024 and sell it today you would earn a total of 12.00 from holding De Grey Mining or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Power Assets Holdings
Performance |
| Timeline |
| De Grey Mining |
| Power Assets Holdings |
De Grey and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Power Assets
The main advantage of trading using opposite De Grey and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| De Grey vs. INTER CARS SA | De Grey vs. Charter Communications | De Grey vs. Rocket Internet SE | De Grey vs. Geely Automobile Holdings |
| Power Assets vs. Taiwan Semiconductor Manufacturing | Power Assets vs. Globex Mining Enterprises | Power Assets vs. Monument Mining Limited | Power Assets vs. Tower Semiconductor |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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