Correlation Between Stelar Metals and DY6 Metals
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and DY6 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 Stelar Metals and DY6 Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and DY6 Metals, you can compare the effects of market volatilities on Stelar Metals and DY6 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 Stelar Metals with a short position of DY6 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and DY6 Metals.
Diversification Opportunities for Stelar Metals and DY6 Metals
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stelar and DY6 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and DY6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DY6 Metals and Stelar 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 Stelar Metals are associated (or correlated) with DY6 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DY6 Metals has no effect on the direction of Stelar Metals i.e., Stelar Metals and DY6 Metals go up and down completely randomly.
Pair Corralation between Stelar Metals and DY6 Metals
Assuming the 90 days trading horizon Stelar Metals is expected to generate 0.73 times more return on investment than DY6 Metals. However, Stelar Metals is 1.36 times less risky than DY6 Metals. It trades about -0.05 of its potential returns per unit of risk. DY6 Metals is currently generating about -0.16 per unit of risk. If you would invest 7.00 in Stelar Metals on November 2, 2024 and sell it today you would lose (0.60) from holding Stelar Metals or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.36% |
| Values | Daily Returns |
Stelar Metals vs. DY6 Metals
Performance |
| Timeline |
| Stelar Metals |
| DY6 Metals |
Stelar Metals and DY6 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and DY6 Metals
The main advantage of trading using opposite Stelar Metals and DY6 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, DY6 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 DY6 Metals will offset losses from the drop in DY6 Metals' long position.| Stelar Metals vs. Vulcan Steel | Stelar Metals vs. Computershare | Stelar Metals vs. Mayfield Childcare | Stelar Metals vs. Ironbark Capital |
| DY6 Metals vs. Gold Road Resources | DY6 Metals vs. ARN Media Limited | DY6 Metals vs. Spirit Telecom | DY6 Metals vs. Saferoads Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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