Correlation Between IXUP and Champion Iron
Can any of the company-specific risk be diversified away by investing in both IXUP and Champion Iron 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 IXUP and Champion Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IXUP and Champion Iron, you can compare the effects of market volatilities on IXUP and Champion Iron 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 IXUP with a short position of Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of IXUP and Champion Iron.
Diversification Opportunities for IXUP and Champion Iron
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between IXUP and Champion is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding IXUP and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron and IXUP 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 IXUP are associated (or correlated) with Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of IXUP i.e., IXUP and Champion Iron go up and down completely randomly.
Pair Corralation between IXUP and Champion Iron
Assuming the 90 days trading horizon IXUP is expected to under-perform the Champion Iron. In addition to that, IXUP is 3.3 times more volatile than Champion Iron. It trades about -0.03 of its total potential returns per unit of risk. Champion Iron is currently generating about -0.03 per unit of volatility. If you would invest 737.00 in Champion Iron on September 1, 2024 and sell it today you would lose (164.00) from holding Champion Iron or give up 22.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IXUP vs. Champion Iron
Performance |
| Timeline |
| IXUP |
| Champion Iron |
IXUP and Champion Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IXUP and Champion Iron
The main advantage of trading using opposite IXUP and Champion Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IXUP position performs unexpectedly, Champion Iron 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 Champion Iron will offset losses from the drop in Champion Iron's long position.The idea behind IXUP and Champion Iron pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Champion Iron vs. Dicker Data | Champion Iron vs. Data3 | Champion Iron vs. Retail Food Group | Champion Iron vs. Charter Hall Retail |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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