Correlation Between Stelar Metals and Mount Gibson
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Mount Gibson 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 Mount Gibson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Mount Gibson Iron, you can compare the effects of market volatilities on Stelar Metals and Mount Gibson 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 Mount Gibson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Mount Gibson.
Diversification Opportunities for Stelar Metals and Mount Gibson
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stelar and Mount is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Mount Gibson Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mount Gibson 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 Mount Gibson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mount Gibson Iron has no effect on the direction of Stelar Metals i.e., Stelar Metals and Mount Gibson go up and down completely randomly.
Pair Corralation between Stelar Metals and Mount Gibson
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Mount Gibson. In addition to that, Stelar Metals is 1.57 times more volatile than Mount Gibson Iron. It trades about -0.06 of its total potential returns per unit of risk. Mount Gibson Iron is currently generating about 0.17 per unit of volatility. If you would invest 30.00 in Mount Gibson Iron on November 4, 2024 and sell it today you would earn a total of 2.00 from holding Mount Gibson Iron or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Stelar Metals vs. Mount Gibson Iron
Performance |
| Timeline |
| Stelar Metals |
| Mount Gibson Iron |
Stelar Metals and Mount Gibson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Mount Gibson
The main advantage of trading using opposite Stelar Metals and Mount Gibson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Mount Gibson 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 Mount Gibson will offset losses from the drop in Mount Gibson's long position.| Stelar Metals vs. Centrex Metals | Stelar Metals vs. Tombador Iron | Stelar Metals vs. Truscott Mining Corp | Stelar Metals vs. Aussie Broadband |
| Mount Gibson vs. Group 6 Metals | Mount Gibson vs. Centrex Metals | Mount Gibson vs. Norfolk Metals | Mount Gibson vs. Falcon 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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