Correlation Between Kalgoorlie Gold and Hammer Metals
Can any of the company-specific risk be diversified away by investing in both Kalgoorlie Gold and Hammer 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 Kalgoorlie Gold and Hammer Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kalgoorlie Gold Mining and Hammer Metals, you can compare the effects of market volatilities on Kalgoorlie Gold and Hammer 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 Kalgoorlie Gold with a short position of Hammer Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalgoorlie Gold and Hammer Metals.
Diversification Opportunities for Kalgoorlie Gold and Hammer Metals
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kalgoorlie and Hammer is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kalgoorlie Gold Mining and Hammer Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hammer Metals and Kalgoorlie Gold 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 Kalgoorlie Gold Mining are associated (or correlated) with Hammer Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hammer Metals has no effect on the direction of Kalgoorlie Gold i.e., Kalgoorlie Gold and Hammer Metals go up and down completely randomly.
Pair Corralation between Kalgoorlie Gold and Hammer Metals
Assuming the 90 days trading horizon Kalgoorlie Gold Mining is expected to under-perform the Hammer Metals. In addition to that, Kalgoorlie Gold is 1.11 times more volatile than Hammer Metals. It trades about -0.11 of its total potential returns per unit of risk. Hammer Metals is currently generating about -0.01 per unit of volatility. If you would invest 3.60 in Hammer Metals on October 24, 2024 and sell it today you would lose (0.40) from holding Hammer Metals or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kalgoorlie Gold Mining vs. Hammer Metals
Performance |
| Timeline |
| Kalgoorlie Gold Mining |
| Hammer Metals |
Kalgoorlie Gold and Hammer Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalgoorlie Gold and Hammer Metals
The main advantage of trading using opposite Kalgoorlie Gold and Hammer Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalgoorlie Gold position performs unexpectedly, Hammer 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 Hammer Metals will offset losses from the drop in Hammer Metals' long position.| Kalgoorlie Gold vs. Northern Star Resources | Kalgoorlie Gold vs. Evolution Mining | Kalgoorlie Gold vs. Bluescope Steel | Kalgoorlie Gold vs. De Grey Mining |
| Hammer Metals vs. Australian Agricultural | Hammer Metals vs. Sports Entertainment Group | Hammer Metals vs. Sayona Mining | Hammer Metals vs. Kalgoorlie Gold 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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