Correlation Between Duketon Mining and Santana Minerals
Can any of the company-specific risk be diversified away by investing in both Duketon Mining and Santana Minerals 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 Duketon Mining and Santana Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duketon Mining and Santana Minerals, you can compare the effects of market volatilities on Duketon Mining and Santana Minerals 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 Duketon Mining with a short position of Santana Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duketon Mining and Santana Minerals.
Diversification Opportunities for Duketon Mining and Santana Minerals
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Duketon and Santana is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Duketon Mining and Santana Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santana Minerals and Duketon Mining 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 Duketon Mining are associated (or correlated) with Santana Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santana Minerals has no effect on the direction of Duketon Mining i.e., Duketon Mining and Santana Minerals go up and down completely randomly.
Pair Corralation between Duketon Mining and Santana Minerals
Assuming the 90 days trading horizon Duketon Mining is expected to under-perform the Santana Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Duketon Mining is 1.22 times less risky than Santana Minerals. The stock trades about -0.33 of its potential returns per unit of risk. The Santana Minerals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Santana Minerals on October 13, 2024 and sell it today you would earn a total of 1.00 from holding Santana Minerals or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Duketon Mining vs. Santana Minerals
Performance |
| Timeline |
| Duketon Mining |
| Santana Minerals |
Duketon Mining and Santana Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duketon Mining and Santana Minerals
The main advantage of trading using opposite Duketon Mining and Santana Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duketon Mining position performs unexpectedly, Santana Minerals 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 Santana Minerals will offset losses from the drop in Santana Minerals' long position.| Duketon Mining vs. A1 Investments Resources | Duketon Mining vs. Flagship Investments | Duketon Mining vs. Autosports Group | Duketon Mining vs. Seven West Media |
| Santana Minerals vs. Maggie Beer Holdings | Santana Minerals vs. Aussie Broadband | Santana Minerals vs. Cleanaway Waste Management | Santana Minerals vs. Duketon Mining |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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