Correlation Between DRDGOLD and Sibanye Stillwater
Can any of the company-specific risk be diversified away by investing in both DRDGOLD and Sibanye Stillwater 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 DRDGOLD and Sibanye Stillwater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRDGOLD Limited and Sibanye Stillwater, you can compare the effects of market volatilities on DRDGOLD and Sibanye Stillwater 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 DRDGOLD with a short position of Sibanye Stillwater. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRDGOLD and Sibanye Stillwater.
Diversification Opportunities for DRDGOLD and Sibanye Stillwater
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DRDGOLD and Sibanye is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding DRDGOLD Limited and Sibanye Stillwater in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Stillwater and DRDGOLD 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 DRDGOLD Limited are associated (or correlated) with Sibanye Stillwater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Stillwater has no effect on the direction of DRDGOLD i.e., DRDGOLD and Sibanye Stillwater go up and down completely randomly.
Pair Corralation between DRDGOLD and Sibanye Stillwater
Assuming the 90 days trading horizon DRDGOLD Limited is expected to generate 0.71 times more return on investment than Sibanye Stillwater. However, DRDGOLD Limited is 1.41 times less risky than Sibanye Stillwater. It trades about 0.04 of its potential returns per unit of risk. Sibanye Stillwater is currently generating about -0.04 per unit of risk. If you would invest 160,500 in DRDGOLD Limited on August 31, 2024 and sell it today you would earn a total of 14,800 from holding DRDGOLD Limited or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DRDGOLD Limited vs. Sibanye Stillwater
Performance |
| Timeline |
| DRDGOLD Limited |
| Sibanye Stillwater |
DRDGOLD and Sibanye Stillwater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRDGOLD and Sibanye Stillwater
The main advantage of trading using opposite DRDGOLD and Sibanye Stillwater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRDGOLD position performs unexpectedly, Sibanye Stillwater 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 Sibanye Stillwater will offset losses from the drop in Sibanye Stillwater's long position.| DRDGOLD vs. Gold Fields | DRDGOLD vs. Sibanye Stillwater | DRDGOLD vs. Harmony Gold Mining | DRDGOLD vs. Pan African Resources |
| Sibanye Stillwater vs. Safari Investments RSA | Sibanye Stillwater vs. African Media Entertainment | Sibanye Stillwater vs. Life Healthcare | Sibanye Stillwater vs. Ascendis Health |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |