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 Media, 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
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DY6 and Southern is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding DY6 Metals and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media 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 Media 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 under-perform the Southern Cross. In addition to that, DY6 Metals is 2.35 times more volatile than Southern Cross Media. It trades about -0.01 of its total potential returns per unit of risk. Southern Cross Media is currently generating about 0.1 per unit of volatility. If you would invest 60.00 in Southern Cross Media on November 9, 2024 and sell it today you would earn a total of 2.00 from holding Southern Cross Media or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DY6 Metals vs. Southern Cross Media
Performance |
| Timeline |
| DY6 Metals |
| Southern Cross Media |
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. Epsilon Healthcare | DY6 Metals vs. Carawine Resources Limited | DY6 Metals vs. Hammer Metals | DY6 Metals vs. Aurelia Metals |
| Southern Cross vs. Westpac Banking | Southern Cross vs. National Australia Bank | Southern Cross vs. National Australia Bank | Southern Cross vs. Commonwealth Bank |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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