Correlation Between SSR Mining and DRDGOLD Limited
Can any of the company-specific risk be diversified away by investing in both SSR Mining and DRDGOLD Limited 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 SSR Mining and DRDGOLD Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSR Mining and DRDGOLD Limited ADR, you can compare the effects of market volatilities on SSR Mining and DRDGOLD Limited 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 SSR Mining with a short position of DRDGOLD Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSR Mining and DRDGOLD Limited.
Diversification Opportunities for SSR Mining and DRDGOLD Limited
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SSR and DRDGOLD is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding SSR Mining and DRDGOLD Limited ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRDGOLD Limited ADR and SSR Mining 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 SSR Mining are associated (or correlated) with DRDGOLD Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRDGOLD Limited ADR has no effect on the direction of SSR Mining i.e., SSR Mining and DRDGOLD Limited go up and down completely randomly.
Pair Corralation between SSR Mining and DRDGOLD Limited
Given the investment horizon of 90 days SSR Mining is expected to generate 1.04 times more return on investment than DRDGOLD Limited. However, SSR Mining is 1.04 times more volatile than DRDGOLD Limited ADR. It trades about -0.09 of its potential returns per unit of risk. DRDGOLD Limited ADR is currently generating about -0.26 per unit of risk. If you would invest 635.00 in SSR Mining on August 28, 2024 and sell it today you would lose (59.00) from holding SSR Mining or give up 9.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSR Mining vs. DRDGOLD Limited ADR
Performance |
| Timeline |
| SSR Mining |
| DRDGOLD Limited ADR |
SSR Mining and DRDGOLD Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSR Mining and DRDGOLD Limited
The main advantage of trading using opposite SSR Mining and DRDGOLD Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSR Mining position performs unexpectedly, DRDGOLD Limited 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 DRDGOLD Limited will offset losses from the drop in DRDGOLD Limited's long position.| SSR Mining vs. Centerra Gold | SSR Mining vs. Gold Fields Ltd | SSR Mining vs. Eldorado Gold Corp | SSR Mining vs. Osisko Gold Ro |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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