Correlation Between Sky Metals and SEVEN GROUP
Can any of the company-specific risk be diversified away by investing in both Sky Metals and SEVEN GROUP 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 Sky Metals and SEVEN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Metals and SEVEN GROUP HOLDINGS, you can compare the effects of market volatilities on Sky Metals and SEVEN GROUP 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 Sky Metals with a short position of SEVEN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Metals and SEVEN GROUP.
Diversification Opportunities for Sky Metals and SEVEN GROUP
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sky and SEVEN is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sky Metals and SEVEN GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEVEN GROUP HOLDINGS and Sky Metals 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 Sky Metals are associated (or correlated) with SEVEN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEVEN GROUP HOLDINGS has no effect on the direction of Sky Metals i.e., Sky Metals and SEVEN GROUP go up and down completely randomly.
Pair Corralation between Sky Metals and SEVEN GROUP
Assuming the 90 days trading horizon Sky Metals is expected to generate 2.48 times more return on investment than SEVEN GROUP. However, Sky Metals is 2.48 times more volatile than SEVEN GROUP HOLDINGS. It trades about 0.05 of its potential returns per unit of risk. SEVEN GROUP HOLDINGS is currently generating about -0.02 per unit of risk. If you would invest 5.40 in Sky Metals on November 1, 2024 and sell it today you would earn a total of 0.10 from holding Sky Metals or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.0% |
| Values | Daily Returns |
Sky Metals vs. SEVEN GROUP HOLDINGS
Performance |
| Timeline |
| Sky Metals |
| SEVEN GROUP HOLDINGS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Sky Metals and SEVEN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Metals and SEVEN GROUP
The main advantage of trading using opposite Sky Metals and SEVEN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Metals position performs unexpectedly, SEVEN GROUP 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 SEVEN GROUP will offset losses from the drop in SEVEN GROUP's long position.| Sky Metals vs. Balkan Mining and | Sky Metals vs. Great Southern Mining | Sky Metals vs. Evolution Mining | Sky Metals vs. Rand Mining |
| SEVEN GROUP vs. Auswide Bank | SEVEN GROUP vs. Lykos Metals | SEVEN GROUP vs. FireFly Metals | SEVEN GROUP vs. Sky 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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