Correlation Between Stelar Metals and Hawsons Iron
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Hawsons Iron 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 Hawsons Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Hawsons Iron, you can compare the effects of market volatilities on Stelar Metals and Hawsons Iron 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 Hawsons Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Hawsons Iron.
Diversification Opportunities for Stelar Metals and Hawsons Iron
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stelar and Hawsons is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Hawsons Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawsons Iron 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 Hawsons Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawsons Iron has no effect on the direction of Stelar Metals i.e., Stelar Metals and Hawsons Iron go up and down completely randomly.
Pair Corralation between Stelar Metals and Hawsons Iron
Assuming the 90 days trading horizon Stelar Metals is expected to generate 1.11 times more return on investment than Hawsons Iron. However, Stelar Metals is 1.11 times more volatile than Hawsons Iron. It trades about 0.0 of its potential returns per unit of risk. Hawsons Iron is currently generating about -0.05 per unit of risk. If you would invest 14.00 in Stelar Metals on August 30, 2024 and sell it today you would lose (7.50) from holding Stelar Metals or give up 53.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Hawsons Iron
Performance |
| Timeline |
| Stelar Metals |
| Hawsons Iron |
Stelar Metals and Hawsons Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Hawsons Iron
The main advantage of trading using opposite Stelar Metals and Hawsons Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Hawsons Iron 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 Hawsons Iron will offset losses from the drop in Hawsons Iron's long position.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Hawsons Iron vs. Richmond Vanadium Technology | Hawsons Iron vs. Computershare | Hawsons Iron vs. Westpac Banking | Hawsons Iron vs. Macquarie Bank Limited |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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