Correlation Between STGEORGE MINING and Sanyo Chemical
Can any of the company-specific risk be diversified away by investing in both STGEORGE MINING and Sanyo Chemical 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 STGEORGE MINING and Sanyo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STGEORGE MINING LTD and Sanyo Chemical Industries, you can compare the effects of market volatilities on STGEORGE MINING and Sanyo Chemical 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 STGEORGE MINING with a short position of Sanyo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of STGEORGE MINING and Sanyo Chemical.
Diversification Opportunities for STGEORGE MINING and Sanyo Chemical
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STGEORGE and Sanyo is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding STGEORGE MINING LTD and Sanyo Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyo Chemical Industries and STGEORGE MINING 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 STGEORGE MINING LTD are associated (or correlated) with Sanyo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyo Chemical Industries has no effect on the direction of STGEORGE MINING i.e., STGEORGE MINING and Sanyo Chemical go up and down completely randomly.
Pair Corralation between STGEORGE MINING and Sanyo Chemical
Assuming the 90 days horizon STGEORGE MINING LTD is expected to generate 3.92 times more return on investment than Sanyo Chemical. However, STGEORGE MINING is 3.92 times more volatile than Sanyo Chemical Industries. It trades about 0.0 of its potential returns per unit of risk. Sanyo Chemical Industries is currently generating about -0.05 per unit of risk. If you would invest 1.20 in STGEORGE MINING LTD on October 26, 2024 and sell it today you would lose (0.05) from holding STGEORGE MINING LTD or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STGEORGE MINING LTD vs. Sanyo Chemical Industries
Performance |
| Timeline |
| STGEORGE MINING LTD |
| Sanyo Chemical Industries |
STGEORGE MINING and Sanyo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STGEORGE MINING and Sanyo Chemical
The main advantage of trading using opposite STGEORGE MINING and Sanyo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STGEORGE MINING position performs unexpectedly, Sanyo Chemical 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 Sanyo Chemical will offset losses from the drop in Sanyo Chemical's long position.| STGEORGE MINING vs. BHP Group Limited | STGEORGE MINING vs. BHP Group Limited | STGEORGE MINING vs. Rio Tinto Group | STGEORGE MINING vs. Vale SA |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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