Correlation Between Global Health and De Grey
Can any of the company-specific risk be diversified away by investing in both Global Health and De Grey 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 Global Health and De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and De Grey Mining, you can compare the effects of market volatilities on Global Health and De Grey 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 Global Health with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and De Grey.
Diversification Opportunities for Global Health and De Grey
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and DEG is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining and Global Health 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 Global Health are associated (or correlated) with De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of Global Health i.e., Global Health and De Grey go up and down completely randomly.
Pair Corralation between Global Health and De Grey
Assuming the 90 days trading horizon Global Health is expected to under-perform the De Grey. In addition to that, Global Health is 1.23 times more volatile than De Grey Mining. It trades about -0.12 of its total potential returns per unit of risk. De Grey Mining is currently generating about 0.03 per unit of volatility. If you would invest 195.00 in De Grey Mining on December 1, 2024 and sell it today you would earn a total of 2.00 from holding De Grey Mining or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health vs. De Grey Mining
Performance |
| Timeline |
| Global Health |
| De Grey Mining |
Global Health and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and De Grey
The main advantage of trading using opposite Global Health and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey's long position.| Global Health vs. Sandon Capital Investments | Global Health vs. REGAL ASIAN INVESTMENTS | Global Health vs. Hudson Investment Group | Global Health vs. MFF Capital Investments |
| De Grey vs. Sports Entertainment Group | De Grey vs. Pinnacle Investment Management | De Grey vs. Autosports Group | De Grey vs. Hotel Property 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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