Correlation Between DY6 Metals and IXUP
Can any of the company-specific risk be diversified away by investing in both DY6 Metals and IXUP 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 DY6 Metals and IXUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DY6 Metals and IXUP, you can compare the effects of market volatilities on DY6 Metals and IXUP 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 DY6 Metals with a short position of IXUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of DY6 Metals and IXUP.
Diversification Opportunities for DY6 Metals and IXUP
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DY6 and IXUP is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding DY6 Metals and IXUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IXUP and DY6 Metals 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 DY6 Metals are associated (or correlated) with IXUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IXUP has no effect on the direction of DY6 Metals i.e., DY6 Metals and IXUP go up and down completely randomly.
Pair Corralation between DY6 Metals and IXUP
Assuming the 90 days trading horizon DY6 Metals is expected to under-perform the IXUP. But the stock apears to be less risky and, when comparing its historical volatility, DY6 Metals is 1.6 times less risky than IXUP. The stock trades about -0.26 of its potential returns per unit of risk. The IXUP is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1.25 in IXUP on August 29, 2024 and sell it today you would lose (0.05) from holding IXUP or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DY6 Metals vs. IXUP
Performance |
| Timeline |
| DY6 Metals |
| IXUP |
DY6 Metals and IXUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DY6 Metals and IXUP
The main advantage of trading using opposite DY6 Metals and IXUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DY6 Metals position performs unexpectedly, IXUP 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 IXUP will offset losses from the drop in IXUP's long position.| DY6 Metals vs. Northern Star Resources | DY6 Metals vs. Evolution Mining | DY6 Metals vs. Bluescope Steel | DY6 Metals vs. Sandfire Resources NL |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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