Correlation Between Steamships Trading and Akora Resources
Can any of the company-specific risk be diversified away by investing in both Steamships Trading and Akora Resources 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 Akora Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steamships Trading and Akora Resources, you can compare the effects of market volatilities on Steamships Trading and Akora Resources 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 Akora Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steamships Trading and Akora Resources.
Diversification Opportunities for Steamships Trading and Akora Resources
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steamships and Akora is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Steamships Trading and Akora Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akora Resources 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 Akora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akora Resources has no effect on the direction of Steamships Trading i.e., Steamships Trading and Akora Resources go up and down completely randomly.
Pair Corralation between Steamships Trading and Akora Resources
Assuming the 90 days trading horizon Steamships Trading is expected to generate 0.25 times more return on investment than Akora Resources. However, Steamships Trading is 3.97 times less risky than Akora Resources. It trades about 0.05 of its potential returns per unit of risk. Akora Resources is currently generating about 0.01 per unit of risk. If you would invest 988.00 in Steamships Trading on September 4, 2024 and sell it today you would earn a total of 402.00 from holding Steamships Trading or generate 40.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Steamships Trading vs. Akora Resources
Performance |
| Timeline |
| Steamships Trading |
| Akora Resources |
Steamships Trading and Akora Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steamships Trading and Akora Resources
The main advantage of trading using opposite Steamships Trading and Akora Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steamships Trading position performs unexpectedly, Akora Resources 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 Akora Resources will offset losses from the drop in Akora Resources' long position.| Steamships Trading vs. Aneka Tambang Tbk | Steamships Trading vs. ANZ Group Holdings | Steamships Trading vs. Australia and New | Steamships Trading vs. ANZ Group Holdings |
| Akora Resources vs. Northern Star Resources | Akora Resources vs. Evolution Mining | Akora Resources vs. Bluescope Steel | Akora Resources vs. Sandfire Resources NL |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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