Correlation Between Group 6 and Archer Exploration
Can any of the company-specific risk be diversified away by investing in both Group 6 and Archer Exploration 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 Group 6 and Archer Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 6 Metals and Archer Exploration, you can compare the effects of market volatilities on Group 6 and Archer Exploration 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 Group 6 with a short position of Archer Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Archer Exploration.
Diversification Opportunities for Group 6 and Archer Exploration
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Group and Archer is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and Archer Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Exploration and Group 6 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 Group 6 Metals are associated (or correlated) with Archer Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Exploration has no effect on the direction of Group 6 i.e., Group 6 and Archer Exploration go up and down completely randomly.
Pair Corralation between Group 6 and Archer Exploration
Assuming the 90 days trading horizon Group 6 Metals is expected to under-perform the Archer Exploration. In addition to that, Group 6 is 1.06 times more volatile than Archer Exploration. It trades about -0.04 of its total potential returns per unit of risk. Archer Exploration is currently generating about 0.0 per unit of volatility. If you would invest 66.00 in Archer Exploration on September 3, 2024 and sell it today you would lose (34.00) from holding Archer Exploration or give up 51.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. Archer Exploration
Performance |
| Timeline |
| Group 6 Metals |
| Archer Exploration |
Group 6 and Archer Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Archer Exploration
The main advantage of trading using opposite Group 6 and Archer Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, Archer Exploration 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 Archer Exploration will offset losses from the drop in Archer Exploration's long position.| Group 6 vs. Northern Star Resources | Group 6 vs. Evolution Mining | Group 6 vs. Bluescope Steel | Group 6 vs. Aneka Tambang Tbk |
| Archer Exploration vs. Northern Star Resources | Archer Exploration vs. Evolution Mining | Archer Exploration vs. Bluescope Steel | Archer Exploration vs. Aneka Tambang Tbk |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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