Correlation Between Sandfire Resources and Classic Minerals
Can any of the company-specific risk be diversified away by investing in both Sandfire Resources and Classic Minerals 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 Sandfire Resources and Classic Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandfire Resources NL and Classic Minerals, you can compare the effects of market volatilities on Sandfire Resources and Classic Minerals 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 Sandfire Resources with a short position of Classic Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and Classic Minerals.
Diversification Opportunities for Sandfire Resources and Classic Minerals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sandfire and Classic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources NL and Classic Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Classic Minerals and Sandfire 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 Sandfire Resources NL are associated (or correlated) with Classic Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Classic Minerals has no effect on the direction of Sandfire Resources i.e., Sandfire Resources and Classic Minerals go up and down completely randomly.
Pair Corralation between Sandfire Resources and Classic Minerals
Assuming the 90 days trading horizon Sandfire Resources NL is expected to generate 0.19 times more return on investment than Classic Minerals. However, Sandfire Resources NL is 5.38 times less risky than Classic Minerals. It trades about 0.09 of its potential returns per unit of risk. Classic Minerals is currently generating about -0.07 per unit of risk. If you would invest 680.00 in Sandfire Resources NL on September 12, 2024 and sell it today you would earn a total of 374.00 from holding Sandfire Resources NL or generate 55.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sandfire Resources NL vs. Classic Minerals
Performance |
| Timeline |
| Sandfire Resources |
| Classic Minerals |
Sandfire Resources and Classic Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandfire Resources and Classic Minerals
The main advantage of trading using opposite Sandfire Resources and Classic Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandfire Resources position performs unexpectedly, Classic Minerals 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 Classic Minerals will offset losses from the drop in Classic Minerals' long position.| Sandfire Resources vs. ABACUS STORAGE KING | Sandfire Resources vs. MetalsGrove Mining | Sandfire Resources vs. Qbe Insurance Group | Sandfire Resources vs. Alto Metals |
| Classic Minerals vs. Microequities Asset Management | Classic Minerals vs. Black Rock Mining | Classic Minerals vs. Ora Banda Mining | Classic Minerals vs. Argo Investments |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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