Correlation Between Savannah Resources and Altura Mining
Can any of the company-specific risk be diversified away by investing in both Savannah Resources and Altura Mining 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 Savannah Resources and Altura Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Savannah Resources Plc and Altura Mining Limited, you can compare the effects of market volatilities on Savannah Resources and Altura Mining 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 Savannah Resources with a short position of Altura Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Savannah Resources and Altura Mining.
Diversification Opportunities for Savannah Resources and Altura Mining
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Savannah and Altura is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Savannah Resources Plc and Altura Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Mining Limited and Savannah 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 Savannah Resources Plc are associated (or correlated) with Altura Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Mining Limited has no effect on the direction of Savannah Resources i.e., Savannah Resources and Altura Mining go up and down completely randomly.
Pair Corralation between Savannah Resources and Altura Mining
Assuming the 90 days horizon Savannah Resources is expected to generate 4.09 times less return on investment than Altura Mining. But when comparing it to its historical volatility, Savannah Resources Plc is 2.88 times less risky than Altura Mining. It trades about 0.16 of its potential returns per unit of risk. Altura Mining Limited is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1.20 in Altura Mining Limited on November 5, 2024 and sell it today you would earn a total of 1.10 from holding Altura Mining Limited or generate 91.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Savannah Resources Plc vs. Altura Mining Limited
Performance |
| Timeline |
| Savannah Resources Plc |
| Altura Mining Limited |
Savannah Resources and Altura Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Savannah Resources and Altura Mining
The main advantage of trading using opposite Savannah Resources and Altura Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Savannah Resources position performs unexpectedly, Altura Mining 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 Altura Mining will offset losses from the drop in Altura Mining's long position.| Savannah Resources vs. Lithium Energi Exploration | Savannah Resources vs. Critical Elements | Savannah Resources vs. International Battery Metals | Savannah Resources vs. Talga Group |
| Altura Mining vs. Aurelia Metals Limited | Altura Mining vs. Ascendant Resources | Altura Mining vs. Artemis Resources | Altura Mining vs. Azimut Exploration |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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