Correlation Between Group 6 and Hub24
Can any of the company-specific risk be diversified away by investing in both Group 6 and Hub24 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 Hub24 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 Hub24, you can compare the effects of market volatilities on Group 6 and Hub24 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 Hub24. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Hub24.
Diversification Opportunities for Group 6 and Hub24
Very good diversification
The 3 months correlation between Group and Hub24 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and Hub24 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub24 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 Hub24. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub24 has no effect on the direction of Group 6 i.e., Group 6 and Hub24 go up and down completely randomly.
Pair Corralation between Group 6 and Hub24
Assuming the 90 days trading horizon Group 6 Metals is expected to under-perform the Hub24. In addition to that, Group 6 is 4.1 times more volatile than Hub24. It trades about -0.06 of its total potential returns per unit of risk. Hub24 is currently generating about 0.23 per unit of volatility. If you would invest 2,999 in Hub24 on August 26, 2024 and sell it today you would earn a total of 4,488 from holding Hub24 or generate 149.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. Hub24
Performance |
| Timeline |
| Group 6 Metals |
| Hub24 |
Group 6 and Hub24 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Hub24
The main advantage of trading using opposite Group 6 and Hub24 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, Hub24 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 Hub24 will offset losses from the drop in Hub24's long position.| Group 6 vs. Northern Star Resources | Group 6 vs. Evolution Mining | Group 6 vs. Bluescope Steel | Group 6 vs. Sandfire Resources NL |
| Hub24 vs. A1 Investments Resources | Hub24 vs. Argo Investments | Hub24 vs. Sandon Capital Investments | Hub24 vs. Platinum Asia Investments |
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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