Correlation Between Sandfire Resources and Kiplin Metals
Can any of the company-specific risk be diversified away by investing in both Sandfire Resources and Kiplin Metals 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 Kiplin Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandfire Resources America and Kiplin Metals, you can compare the effects of market volatilities on Sandfire Resources and Kiplin Metals 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 Kiplin Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and Kiplin Metals.
Diversification Opportunities for Sandfire Resources and Kiplin Metals
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sandfire and Kiplin is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources America and Kiplin Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiplin Metals 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 America are associated (or correlated) with Kiplin Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiplin Metals has no effect on the direction of Sandfire Resources i.e., Sandfire Resources and Kiplin Metals go up and down completely randomly.
Pair Corralation between Sandfire Resources and Kiplin Metals
Assuming the 90 days horizon Sandfire Resources America is expected to generate 1.17 times more return on investment than Kiplin Metals. However, Sandfire Resources is 1.17 times more volatile than Kiplin Metals. It trades about 0.08 of its potential returns per unit of risk. Kiplin Metals is currently generating about -0.13 per unit of risk. If you would invest 28.00 in Sandfire Resources America on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Sandfire Resources America or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sandfire Resources America vs. Kiplin Metals
Performance |
| Timeline |
| Sandfire Resources |
| Kiplin Metals |
Sandfire Resources and Kiplin Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandfire Resources and Kiplin Metals
The main advantage of trading using opposite Sandfire Resources and Kiplin Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandfire Resources position performs unexpectedly, Kiplin Metals 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 Kiplin Metals will offset losses from the drop in Kiplin Metals' long position.| Sandfire Resources vs. Kiplin Metals | Sandfire Resources vs. Pure Energy Minerals | Sandfire Resources vs. Noram Lithium Corp | Sandfire Resources vs. Minnova Corp |
| Kiplin Metals vs. First Majestic Silver | Kiplin Metals vs. Ivanhoe Energy | Kiplin Metals vs. Orezone Gold Corp | Kiplin Metals vs. Faraday Copper Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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