Correlation Between Sandfire Resources and Inventis
Can any of the company-specific risk be diversified away by investing in both Sandfire Resources and Inventis 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 Inventis 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 Inventis, you can compare the effects of market volatilities on Sandfire Resources and Inventis 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 Inventis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and Inventis.
Diversification Opportunities for Sandfire Resources and Inventis
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sandfire and Inventis is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources NL and Inventis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventis 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 Inventis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventis has no effect on the direction of Sandfire Resources i.e., Sandfire Resources and Inventis go up and down completely randomly.
Pair Corralation between Sandfire Resources and Inventis
Assuming the 90 days trading horizon Sandfire Resources NL is expected to under-perform the Inventis. But the stock apears to be less risky and, when comparing its historical volatility, Sandfire Resources NL is 1.84 times less risky than Inventis. The stock trades about -0.2 of its potential returns per unit of risk. The Inventis is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Inventis on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Inventis or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandfire Resources NL vs. Inventis
Performance |
| Timeline |
| Sandfire Resources |
| Inventis |
Sandfire Resources and Inventis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandfire Resources and Inventis
The main advantage of trading using opposite Sandfire Resources and Inventis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandfire Resources position performs unexpectedly, Inventis 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 Inventis will offset losses from the drop in Inventis' long position.| Sandfire Resources vs. Ainsworth Game Technology | Sandfire Resources vs. Air New Zealand | Sandfire Resources vs. Charter Hall Retail | Sandfire Resources vs. Toys R Us |
| Inventis vs. Alternative Investment Trust | Inventis vs. REGAL ASIAN INVESTMENTS | Inventis vs. Platinum Asset Management | Inventis vs. MFF Capital 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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