Correlation Between Vulcan Energy and Imugene
Can any of the company-specific risk be diversified away by investing in both Vulcan Energy and Imugene 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 Vulcan Energy and Imugene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Energy Resources and Imugene, you can compare the effects of market volatilities on Vulcan Energy and Imugene 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 Vulcan Energy with a short position of Imugene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Energy and Imugene.
Diversification Opportunities for Vulcan Energy and Imugene
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vulcan and Imugene is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Energy Resources and Imugene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imugene and Vulcan Energy 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 Vulcan Energy Resources are associated (or correlated) with Imugene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imugene has no effect on the direction of Vulcan Energy i.e., Vulcan Energy and Imugene go up and down completely randomly.
Pair Corralation between Vulcan Energy and Imugene
Assuming the 90 days trading horizon Vulcan Energy Resources is expected to generate 0.82 times more return on investment than Imugene. However, Vulcan Energy Resources is 1.22 times less risky than Imugene. It trades about 0.01 of its potential returns per unit of risk. Imugene is currently generating about -0.02 per unit of risk. If you would invest 726.00 in Vulcan Energy Resources on October 21, 2024 and sell it today you would lose (126.00) from holding Vulcan Energy Resources or give up 17.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Energy Resources vs. Imugene
Performance |
| Timeline |
| Vulcan Energy Resources |
| Imugene |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vulcan Energy and Imugene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Energy and Imugene
The main advantage of trading using opposite Vulcan Energy and Imugene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Energy position performs unexpectedly, Imugene 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 Imugene will offset losses from the drop in Imugene's long position.| Vulcan Energy vs. Northern Star Resources | Vulcan Energy vs. Evolution Mining | Vulcan Energy vs. Bluescope Steel | Vulcan Energy vs. De Grey Mining |
| Imugene vs. FireFly Metals | Imugene vs. Stelar Metals | Imugene vs. Everest Metals | Imugene vs. Hammer Metals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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