Correlation Between Grid Metals and Savannah Resources
Can any of the company-specific risk be diversified away by investing in both Grid Metals and Savannah Resources 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 Grid Metals and Savannah Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grid Metals Corp and Savannah Resources Plc, you can compare the effects of market volatilities on Grid Metals and Savannah Resources 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 Grid Metals with a short position of Savannah Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grid Metals and Savannah Resources.
Diversification Opportunities for Grid Metals and Savannah Resources
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grid and Savannah is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Grid Metals Corp and Savannah Resources Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savannah Resources Plc and Grid Metals 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 Grid Metals Corp are associated (or correlated) with Savannah Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savannah Resources Plc has no effect on the direction of Grid Metals i.e., Grid Metals and Savannah Resources go up and down completely randomly.
Pair Corralation between Grid Metals and Savannah Resources
Assuming the 90 days horizon Grid Metals Corp is expected to under-perform the Savannah Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Grid Metals Corp is 1.66 times less risky than Savannah Resources. The otc stock trades about -0.04 of its potential returns per unit of risk. The Savannah Resources Plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Savannah Resources Plc on August 29, 2024 and sell it today you would earn a total of 0.49 from holding Savannah Resources Plc or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Grid Metals Corp vs. Savannah Resources Plc
Performance |
| Timeline |
| Grid Metals Corp |
| Savannah Resources Plc |
Grid Metals and Savannah Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grid Metals and Savannah Resources
The main advantage of trading using opposite Grid Metals and Savannah Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grid Metals position performs unexpectedly, Savannah Resources 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 Savannah Resources will offset losses from the drop in Savannah Resources' long position.The idea behind Grid Metals Corp and Savannah Resources Plc 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.| Savannah Resources vs. Lithium Energi Exploration | Savannah Resources vs. Critical Elements | Savannah Resources vs. International Battery Metals | Savannah Resources vs. Talga Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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