Correlation Between STORE ELECTRONIC and De Grey
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC and De Grey 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 STORE ELECTRONIC and De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and De Grey Mining, you can compare the effects of market volatilities on STORE ELECTRONIC and De Grey 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 STORE ELECTRONIC with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and De Grey.
Diversification Opportunities for STORE ELECTRONIC and De Grey
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between STORE and DGD is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining and STORE ELECTRONIC 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 STORE ELECTRONIC are associated (or correlated) with De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of STORE ELECTRONIC i.e., STORE ELECTRONIC and De Grey go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and De Grey
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 1.44 times more return on investment than De Grey. However, STORE ELECTRONIC is 1.44 times more volatile than De Grey Mining. It trades about 0.05 of its potential returns per unit of risk. De Grey Mining is currently generating about 0.03 per unit of risk. If you would invest 10,835 in STORE ELECTRONIC on December 17, 2024 and sell it today you would earn a total of 8,055 from holding STORE ELECTRONIC or generate 74.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. De Grey Mining
Performance |
| Timeline |
| STORE ELECTRONIC |
| De Grey Mining |
STORE ELECTRONIC and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and De Grey
The main advantage of trading using opposite STORE ELECTRONIC and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey's long position.| STORE ELECTRONIC vs. AOI Electronics Co | ||
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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