Correlation Between South Star and Ioneer
Can any of the company-specific risk be diversified away by investing in both South Star and Ioneer 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 South Star and Ioneer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Star Battery and ioneer, you can compare the effects of market volatilities on South Star and Ioneer 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 South Star with a short position of Ioneer. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and Ioneer.
Diversification Opportunities for South Star and Ioneer
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and Ioneer is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and ioneer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ioneer and South Star 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 South Star Battery are associated (or correlated) with Ioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ioneer has no effect on the direction of South Star i.e., South Star and Ioneer go up and down completely randomly.
Pair Corralation between South Star and Ioneer
Assuming the 90 days horizon South Star Battery is expected to generate 0.98 times more return on investment than Ioneer. However, South Star Battery is 1.02 times less risky than Ioneer. It trades about -0.08 of its potential returns per unit of risk. ioneer is currently generating about -0.43 per unit of risk. If you would invest 44.00 in South Star Battery on August 29, 2024 and sell it today you would lose (5.00) from holding South Star Battery or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
South Star Battery vs. ioneer
Performance |
| Timeline |
| South Star Battery |
| ioneer |
South Star and Ioneer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and Ioneer
The main advantage of trading using opposite South Star and Ioneer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star position performs unexpectedly, Ioneer 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 Ioneer will offset losses from the drop in Ioneer's long position.| South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Qubec Nickel Corp | South Star vs. Rockridge Resources |
| Ioneer vs. Rockridge Resources | Ioneer vs. Ameriwest Lithium | Ioneer vs. Osisko Metals Incorporated | Ioneer vs. Volt Lithium Corp |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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