Correlation Between Sandfire Resources and De Grey
Can any of the company-specific risk be diversified away by investing in both Sandfire Resources 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 Sandfire Resources and De Grey 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 De Grey Mining, you can compare the effects of market volatilities on Sandfire Resources 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 Sandfire Resources with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and De Grey.
Diversification Opportunities for Sandfire Resources and De Grey
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sandfire and DEG is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources NL 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 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 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 Sandfire Resources i.e., Sandfire Resources and De Grey go up and down completely randomly.
Pair Corralation between Sandfire Resources and De Grey
Assuming the 90 days trading horizon Sandfire Resources NL is expected to generate 0.88 times more return on investment than De Grey. However, Sandfire Resources NL is 1.13 times less risky than De Grey. It trades about 0.06 of its potential returns per unit of risk. De Grey Mining is currently generating about 0.01 per unit of risk. If you would invest 670.00 in Sandfire Resources NL on August 29, 2024 and sell it today you would earn a total of 347.00 from holding Sandfire Resources NL or generate 51.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandfire Resources NL vs. De Grey Mining
Performance |
| Timeline |
| Sandfire Resources |
| De Grey Mining |
Sandfire Resources and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandfire Resources and De Grey
The main advantage of trading using opposite Sandfire Resources and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandfire Resources 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.| Sandfire Resources vs. Dexus Convenience Retail | Sandfire Resources vs. Collins Foods | Sandfire Resources vs. ABACUS STORAGE KING | Sandfire Resources vs. Genetic Technologies |
| De Grey vs. Aurelia Metals | De Grey vs. Austco Healthcare | De Grey vs. Health and Plant | De Grey vs. Alto Metals |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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