Correlation Between Vitura Health and Sayona Mining
Can any of the company-specific risk be diversified away by investing in both Vitura Health and Sayona 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 Vitura Health and Sayona Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitura Health Limited and Sayona Mining, you can compare the effects of market volatilities on Vitura Health and Sayona 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 Vitura Health with a short position of Sayona Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitura Health and Sayona Mining.
Diversification Opportunities for Vitura Health and Sayona Mining
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vitura and Sayona is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vitura Health Limited and Sayona Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining and Vitura Health 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 Vitura Health Limited are associated (or correlated) with Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining has no effect on the direction of Vitura Health i.e., Vitura Health and Sayona Mining go up and down completely randomly.
Pair Corralation between Vitura Health and Sayona Mining
Assuming the 90 days trading horizon Vitura Health Limited is expected to generate 1.03 times more return on investment than Sayona Mining. However, Vitura Health is 1.03 times more volatile than Sayona Mining. It trades about -0.04 of its potential returns per unit of risk. Sayona Mining is currently generating about -0.06 per unit of risk. If you would invest 52.00 in Vitura Health Limited on October 31, 2024 and sell it today you would lose (44.50) from holding Vitura Health Limited or give up 85.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vitura Health Limited vs. Sayona Mining
Performance |
| Timeline |
| Vitura Health Limited |
| Sayona Mining |
Vitura Health and Sayona Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vitura Health and Sayona Mining
The main advantage of trading using opposite Vitura Health and Sayona Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitura Health position performs unexpectedly, Sayona 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 Sayona Mining will offset losses from the drop in Sayona Mining's long position.| Vitura Health vs. Anteris Technologies | Vitura Health vs. Collins Foods | Vitura Health vs. Southern Cross Media | Vitura Health vs. COAST ENTERTAINMENT HOLDINGS |
| Sayona Mining vs. Talisman Mining | Sayona Mining vs. Pure Foods Tasmania | Sayona Mining vs. Kip McGrath Education | Sayona Mining vs. DMC 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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