Correlation Between Galena Mining and Legacy Iron
Can any of the company-specific risk be diversified away by investing in both Galena Mining and Legacy Iron 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 Galena Mining and Legacy Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galena Mining and Legacy Iron Ore, you can compare the effects of market volatilities on Galena Mining and Legacy Iron 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 Galena Mining with a short position of Legacy Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galena Mining and Legacy Iron.
Diversification Opportunities for Galena Mining and Legacy Iron
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Galena and Legacy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Galena Mining and Legacy Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legacy Iron Ore and Galena 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 Galena Mining are associated (or correlated) with Legacy Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legacy Iron Ore has no effect on the direction of Galena Mining i.e., Galena Mining and Legacy Iron go up and down completely randomly.
Pair Corralation between Galena Mining and Legacy Iron
If you would invest 5.90 in Galena Mining on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Galena Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Galena Mining vs. Legacy Iron Ore
Performance |
| Timeline |
| Galena Mining |
| Legacy Iron Ore |
Galena Mining and Legacy Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galena Mining and Legacy Iron
The main advantage of trading using opposite Galena Mining and Legacy Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galena Mining position performs unexpectedly, Legacy Iron 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 Legacy Iron will offset losses from the drop in Legacy Iron's long position.| Galena Mining vs. Northern Star Resources | Galena Mining vs. Evolution Mining | Galena Mining vs. Bluescope Steel | Galena Mining vs. Sandfire Resources NL |
| Legacy Iron vs. Aussie Broadband | Legacy Iron vs. Galena Mining | Legacy Iron vs. Capitol Health | Legacy Iron vs. Health and Plant |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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