Correlation Between Global Health and Kingsrose Mining
Can any of the company-specific risk be diversified away by investing in both Global Health and Kingsrose Mining 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 Kingsrose Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Health and Kingsrose Mining, you can compare the effects of market volatilities on Global Health and Kingsrose Mining 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 Kingsrose Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Kingsrose Mining.
Diversification Opportunities for Global Health and Kingsrose Mining
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Kingsrose is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and Kingsrose Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsrose 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 Kingsrose Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsrose Mining has no effect on the direction of Global Health i.e., Global Health and Kingsrose Mining go up and down completely randomly.
Pair Corralation between Global Health and Kingsrose Mining
Assuming the 90 days trading horizon Global Health is expected to generate 0.62 times more return on investment than Kingsrose Mining. However, Global Health is 1.63 times less risky than Kingsrose Mining. It trades about 0.02 of its potential returns per unit of risk. Kingsrose Mining is currently generating about -0.04 per unit of risk. If you would invest 14.00 in Global Health on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Global Health or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Health vs. Kingsrose Mining
Performance |
| Timeline |
| Global Health |
| Kingsrose Mining |
Global Health and Kingsrose Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Health and Kingsrose Mining
The main advantage of trading using opposite Global Health and Kingsrose Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health position performs unexpectedly, Kingsrose Mining 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 Kingsrose Mining will offset losses from the drop in Kingsrose Mining's long position.| Global Health vs. Alto Metals | Global Health vs. Ras Technology Holdings | Global Health vs. Ainsworth Game Technology | Global Health vs. Aurelia Metals |
| Kingsrose Mining vs. Northern Star Resources | Kingsrose Mining vs. Evolution Mining | Kingsrose Mining vs. Bluescope Steel | Kingsrose Mining vs. Sandfire Resources NL |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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