Correlation Between Iluka Resources and Silver Dollar
Can any of the company-specific risk be diversified away by investing in both Iluka Resources and Silver Dollar 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 Iluka Resources and Silver Dollar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iluka Resources Ltd and Silver Dollar Resources, you can compare the effects of market volatilities on Iluka Resources and Silver Dollar 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 Iluka Resources with a short position of Silver Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iluka Resources and Silver Dollar.
Diversification Opportunities for Iluka Resources and Silver Dollar
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Iluka and Silver is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Iluka Resources Ltd and Silver Dollar Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Dollar Resources and Iluka Resources 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 Iluka Resources Ltd are associated (or correlated) with Silver Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Dollar Resources has no effect on the direction of Iluka Resources i.e., Iluka Resources and Silver Dollar go up and down completely randomly.
Pair Corralation between Iluka Resources and Silver Dollar
Assuming the 90 days horizon Iluka Resources Ltd is expected to generate 0.68 times more return on investment than Silver Dollar. However, Iluka Resources Ltd is 1.47 times less risky than Silver Dollar. It trades about -0.34 of its potential returns per unit of risk. Silver Dollar Resources is currently generating about -0.3 per unit of risk. If you would invest 2,170 in Iluka Resources Ltd on September 1, 2024 and sell it today you would lose (409.00) from holding Iluka Resources Ltd or give up 18.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Iluka Resources Ltd vs. Silver Dollar Resources
Performance |
| Timeline |
| Iluka Resources |
| Silver Dollar Resources |
Iluka Resources and Silver Dollar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iluka Resources and Silver Dollar
The main advantage of trading using opposite Iluka Resources and Silver Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iluka Resources position performs unexpectedly, Silver Dollar 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 Silver Dollar will offset losses from the drop in Silver Dollar's long position.| Iluka Resources vs. ERAMET SA | Iluka Resources vs. Giyani Metals Corp | Iluka Resources vs. IGO Limited | Iluka Resources vs. Grid Metals Corp |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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