Correlation Between Steamships Trading and Aspire Mining
Can any of the company-specific risk be diversified away by investing in both Steamships Trading and Aspire Mining 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 Steamships Trading and Aspire Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steamships Trading and Aspire Mining, you can compare the effects of market volatilities on Steamships Trading and Aspire Mining 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 Steamships Trading with a short position of Aspire Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steamships Trading and Aspire Mining.
Diversification Opportunities for Steamships Trading and Aspire Mining
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Steamships and Aspire is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Steamships Trading and Aspire Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspire Mining and Steamships Trading 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 Steamships Trading are associated (or correlated) with Aspire Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspire Mining has no effect on the direction of Steamships Trading i.e., Steamships Trading and Aspire Mining go up and down completely randomly.
Pair Corralation between Steamships Trading and Aspire Mining
Assuming the 90 days trading horizon Steamships Trading is expected to generate 0.08 times more return on investment than Aspire Mining. However, Steamships Trading is 12.0 times less risky than Aspire Mining. It trades about -0.2 of its potential returns per unit of risk. Aspire Mining is currently generating about -0.1 per unit of risk. If you would invest 1,400 in Steamships Trading on September 12, 2024 and sell it today you would lose (20.00) from holding Steamships Trading or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steamships Trading vs. Aspire Mining
Performance |
| Timeline |
| Steamships Trading |
| Aspire Mining |
Steamships Trading and Aspire Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steamships Trading and Aspire Mining
The main advantage of trading using opposite Steamships Trading and Aspire Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steamships Trading position performs unexpectedly, Aspire Mining 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 Aspire Mining will offset losses from the drop in Aspire Mining's long position.| Steamships Trading vs. Red Hill Iron | Steamships Trading vs. K2 Asset Management | Steamships Trading vs. Cleanaway Waste Management | Steamships Trading vs. Hawsons Iron |
| Aspire Mining vs. MetalsGrove Mining | Aspire Mining vs. Treasury Wine Estates | Aspire Mining vs. Truscott Mining Corp | Aspire Mining vs. Talisman Mining |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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