Correlation Between Mineral Resources and Giyani Metals

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Can any of the company-specific risk be diversified away by investing in both Mineral Resources and Giyani 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 Mineral Resources and Giyani Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mineral Resources Limited and Giyani Metals Corp, you can compare the effects of market volatilities on Mineral Resources and Giyani 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 Mineral Resources with a short position of Giyani Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mineral Resources and Giyani Metals.

Diversification Opportunities for Mineral Resources and Giyani Metals

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Mineral and Giyani is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Resources Limited and Giyani Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giyani Metals Corp and Mineral 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 Mineral Resources Limited are associated (or correlated) with Giyani Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giyani Metals Corp has no effect on the direction of Mineral Resources i.e., Mineral Resources and Giyani Metals go up and down completely randomly.

Pair Corralation between Mineral Resources and Giyani Metals

Assuming the 90 days horizon Mineral Resources Limited is expected to under-perform the Giyani Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mineral Resources Limited is 1.68 times less risky than Giyani Metals. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Giyani Metals Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Giyani Metals Corp on September 1, 2024 and sell it today you would earn a total of  0.15  from holding Giyani Metals Corp or generate 2.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Mineral Resources Limited  vs.  Giyani Metals Corp

 Performance 
       Timeline  
Mineral Resources 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Mineral Resources Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Mineral Resources may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Giyani Metals Corp 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Giyani Metals Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Giyani Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Mineral Resources and Giyani Metals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mineral Resources and Giyani Metals

The main advantage of trading using opposite Mineral Resources and Giyani Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mineral Resources position performs unexpectedly, Giyani 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 Giyani Metals will offset losses from the drop in Giyani Metals' long position.
The idea behind Mineral Resources Limited and Giyani Metals Corp 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.
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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