Correlation Between De Grey and PEPKOR
Can any of the company-specific risk be diversified away by investing in both De Grey and PEPKOR 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 PEPKOR 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 PEPKOR LTD, you can compare the effects of market volatilities on De Grey and PEPKOR 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 PEPKOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and PEPKOR.
Diversification Opportunities for De Grey and PEPKOR
Poor diversification
The 3 months correlation between DGD and PEPKOR is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD 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 PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of De Grey i.e., De Grey and PEPKOR go up and down completely randomly.
Pair Corralation between De Grey and PEPKOR
Assuming the 90 days trading horizon De Grey is expected to generate 3.56 times less return on investment than PEPKOR. But when comparing it to its historical volatility, De Grey Mining is 6.47 times less risky than PEPKOR. It trades about 0.32 of its potential returns per unit of risk. PEPKOR LTD is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 90.00 in PEPKOR LTD on November 3, 2024 and sell it today you would earn a total of 40.00 from holding PEPKOR LTD or generate 44.44% 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. PEPKOR LTD
Performance |
| Timeline |
| De Grey Mining |
| PEPKOR LTD |
De Grey and PEPKOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and PEPKOR
The main advantage of trading using opposite De Grey and PEPKOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, PEPKOR 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 PEPKOR will offset losses from the drop in PEPKOR's long position.| De Grey vs. Citic Telecom International | De Grey vs. Verizon Communications | De Grey vs. Telecom Argentina SA | De Grey vs. Summit Hotel Properties |
| PEPKOR vs. Zoom Video Communications | PEPKOR vs. Cairo Communication SpA | PEPKOR vs. GALENA MINING LTD | PEPKOR vs. ecotel communication ag |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |