Correlation Between Cobalt Power and Sandfire Resources
Can any of the company-specific risk be diversified away by investing in both Cobalt Power and Sandfire 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 Cobalt Power and Sandfire Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cobalt Power Group and Sandfire Resources America, you can compare the effects of market volatilities on Cobalt Power and Sandfire 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 Cobalt Power with a short position of Sandfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cobalt Power and Sandfire Resources.
Diversification Opportunities for Cobalt Power and Sandfire Resources
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cobalt and Sandfire is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cobalt Power Group and Sandfire Resources America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandfire Resources and Cobalt Power 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 Cobalt Power Group are associated (or correlated) with Sandfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandfire Resources has no effect on the direction of Cobalt Power i.e., Cobalt Power and Sandfire Resources go up and down completely randomly.
Pair Corralation between Cobalt Power and Sandfire Resources
Assuming the 90 days horizon Cobalt Power Group is expected to generate 3.23 times more return on investment than Sandfire Resources. However, Cobalt Power is 3.23 times more volatile than Sandfire Resources America. It trades about 0.07 of its potential returns per unit of risk. Sandfire Resources America is currently generating about 0.05 per unit of risk. If you would invest 10.00 in Cobalt Power Group on September 3, 2024 and sell it today you would lose (7.50) from holding Cobalt Power Group or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Cobalt Power Group vs. Sandfire Resources America
Performance |
| Timeline |
| Cobalt Power Group |
| Sandfire Resources |
Cobalt Power and Sandfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cobalt Power and Sandfire Resources
The main advantage of trading using opposite Cobalt Power and Sandfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cobalt Power position performs unexpectedly, Sandfire 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 Sandfire Resources will offset losses from the drop in Sandfire Resources' long position.| Cobalt Power vs. Tree Island Steel | Cobalt Power vs. Altair Resources | Cobalt Power vs. InPlay Oil Corp | Cobalt Power vs. Rogers Communications |
| Sandfire Resources vs. Algoma Steel Group | Sandfire Resources vs. Champion Iron | Sandfire Resources vs. International Zeolite Corp | Sandfire Resources vs. European Residential Real |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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