Correlation Between Group 6 and Sky Metals
Can any of the company-specific risk be diversified away by investing in both Group 6 and Sky Metals 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 Sky Metals 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 Sky Metals, you can compare the effects of market volatilities on Group 6 and Sky Metals 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 Sky Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Sky Metals.
Diversification Opportunities for Group 6 and Sky Metals
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Group and Sky is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and Sky Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky Metals 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 Sky Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Metals has no effect on the direction of Group 6 i.e., Group 6 and Sky Metals go up and down completely randomly.
Pair Corralation between Group 6 and Sky Metals
If you would invest 2.50 in Group 6 Metals on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Group 6 Metals or generate 0.0% 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. Sky Metals
Performance |
| Timeline |
| Group 6 Metals |
| Sky Metals |
Group 6 and Sky Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Sky Metals
The main advantage of trading using opposite Group 6 and Sky Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, Sky Metals 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 Sky Metals will offset losses from the drop in Sky Metals' long position.| Group 6 vs. Northern Star Resources | Group 6 vs. Evolution Mining | Group 6 vs. Aneka Tambang Tbk | Group 6 vs. De Grey Mining |
| Sky Metals vs. Northern Star Resources | Sky Metals vs. Evolution Mining | Sky Metals vs. Aneka Tambang Tbk | Sky Metals vs. De Grey 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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