Correlation Between Sayona Mining and Globe Metals
Can any of the company-specific risk be diversified away by investing in both Sayona Mining and Globe Metals 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 Sayona Mining and Globe Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sayona Mining and Globe Metals Mining, you can compare the effects of market volatilities on Sayona Mining and Globe Metals 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 Sayona Mining with a short position of Globe Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sayona Mining and Globe Metals.
Diversification Opportunities for Sayona Mining and Globe Metals
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sayona and Globe is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sayona Mining and Globe Metals Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Metals Mining and Sayona 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 Sayona Mining are associated (or correlated) with Globe Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Metals Mining has no effect on the direction of Sayona Mining i.e., Sayona Mining and Globe Metals go up and down completely randomly.
Pair Corralation between Sayona Mining and Globe Metals
Assuming the 90 days trading horizon Sayona Mining is expected to under-perform the Globe Metals. But the stock apears to be less risky and, when comparing its historical volatility, Sayona Mining is 1.56 times less risky than Globe Metals. The stock trades about -0.11 of its potential returns per unit of risk. The Globe Metals Mining is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4.20 in Globe Metals Mining on October 23, 2024 and sell it today you would lose (0.20) from holding Globe Metals Mining or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Sayona Mining vs. Globe Metals Mining
Performance |
| Timeline |
| Sayona Mining |
| Globe Metals Mining |
Sayona Mining and Globe Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sayona Mining and Globe Metals
The main advantage of trading using opposite Sayona Mining and Globe Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sayona Mining position performs unexpectedly, Globe Metals 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 Globe Metals will offset losses from the drop in Globe Metals' long position.| Sayona Mining vs. Northern Star Resources | Sayona Mining vs. Evolution Mining | Sayona Mining vs. Bluescope Steel | Sayona Mining vs. De Grey Mining |
| Globe Metals vs. Northern Star Resources | Globe Metals vs. Evolution Mining | Globe Metals vs. Bluescope Steel | Globe Metals vs. De Grey 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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