Correlation Between DY6 Metals and Southern Cross
Can any of the company-specific risk be diversified away by investing in both DY6 Metals and Southern Cross 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 Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DY6 Metals and Southern Cross Gold, you can compare the effects of market volatilities on DY6 Metals and Southern Cross 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 Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of DY6 Metals and Southern Cross.
Diversification Opportunities for DY6 Metals and Southern Cross
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DY6 and Southern is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding DY6 Metals and Southern Cross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Gold 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 Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Gold has no effect on the direction of DY6 Metals i.e., DY6 Metals and Southern Cross go up and down completely randomly.
Pair Corralation between DY6 Metals and Southern Cross
Assuming the 90 days trading horizon DY6 Metals is expected to generate 2.49 times less return on investment than Southern Cross. In addition to that, DY6 Metals is 3.29 times more volatile than Southern Cross Gold. It trades about 0.01 of its total potential returns per unit of risk. Southern Cross Gold is currently generating about 0.08 per unit of volatility. If you would invest 68.00 in Southern Cross Gold on October 26, 2024 and sell it today you would earn a total of 277.00 from holding Southern Cross Gold or generate 407.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.2% |
| Values | Daily Returns |
DY6 Metals vs. Southern Cross Gold
Performance |
| Timeline |
| DY6 Metals |
| Southern Cross Gold |
DY6 Metals and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DY6 Metals and Southern Cross
The main advantage of trading using opposite DY6 Metals and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DY6 Metals position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| DY6 Metals vs. Diversified United Investment | DY6 Metals vs. De Grey Mining | DY6 Metals vs. Galena Mining | DY6 Metals vs. Hudson Investment Group |
| Southern Cross vs. Sports Entertainment Group | Southern Cross vs. Evolution Mining | Southern Cross vs. MetalsGrove Mining | Southern Cross vs. Metro 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 Stocks Directory module to find actively traded stocks across global markets.
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