Correlation Between Southern Cross and Kalgoorlie Gold
Can any of the company-specific risk be diversified away by investing in both Southern Cross and Kalgoorlie Gold 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 Southern Cross and Kalgoorlie Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Cross Media and Kalgoorlie Gold Mining, you can compare the effects of market volatilities on Southern Cross and Kalgoorlie Gold 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 Southern Cross with a short position of Kalgoorlie Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Cross and Kalgoorlie Gold.
Diversification Opportunities for Southern Cross and Kalgoorlie Gold
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southern and Kalgoorlie is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Southern Cross Media and Kalgoorlie Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalgoorlie Gold Mining and Southern Cross 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 Southern Cross Media are associated (or correlated) with Kalgoorlie Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalgoorlie Gold Mining has no effect on the direction of Southern Cross i.e., Southern Cross and Kalgoorlie Gold go up and down completely randomly.
Pair Corralation between Southern Cross and Kalgoorlie Gold
Assuming the 90 days trading horizon Southern Cross Media is expected to under-perform the Kalgoorlie Gold. But the stock apears to be less risky and, when comparing its historical volatility, Southern Cross Media is 2.25 times less risky than Kalgoorlie Gold. The stock trades about -0.05 of its potential returns per unit of risk. The Kalgoorlie Gold Mining is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Kalgoorlie Gold Mining on October 21, 2024 and sell it today you would lose (1.00) from holding Kalgoorlie Gold Mining or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Cross Media vs. Kalgoorlie Gold Mining
Performance |
| Timeline |
| Southern Cross Media |
| Kalgoorlie Gold Mining |
Southern Cross and Kalgoorlie Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Cross and Kalgoorlie Gold
The main advantage of trading using opposite Southern Cross and Kalgoorlie Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Cross position performs unexpectedly, Kalgoorlie Gold 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 Kalgoorlie Gold will offset losses from the drop in Kalgoorlie Gold's long position.| Southern Cross vs. Westpac Banking | Southern Cross vs. Firstwave Cloud Technology | Southern Cross vs. Commonwealth Bank of | Southern Cross vs. Air New Zealand |
| Kalgoorlie Gold vs. Sports Entertainment Group | Kalgoorlie Gold vs. Southern Cross Media | Kalgoorlie Gold vs. Aspire Mining | Kalgoorlie Gold vs. M3 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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