Correlation Between STRAITS TRADG and DevEx Resources
Can any of the company-specific risk be diversified away by investing in both STRAITS TRADG and DevEx Resources 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 STRAITS TRADG and DevEx Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAITS TRADG SD and DevEx Resources Limited, you can compare the effects of market volatilities on STRAITS TRADG and DevEx Resources 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 STRAITS TRADG with a short position of DevEx Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAITS TRADG and DevEx Resources.
Diversification Opportunities for STRAITS TRADG and DevEx Resources
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STRAITS and DevEx is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding STRAITS TRADG SD and DevEx Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DevEx Resources and STRAITS TRADG 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 STRAITS TRADG SD are associated (or correlated) with DevEx Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DevEx Resources has no effect on the direction of STRAITS TRADG i.e., STRAITS TRADG and DevEx Resources go up and down completely randomly.
Pair Corralation between STRAITS TRADG and DevEx Resources
Assuming the 90 days horizon STRAITS TRADG SD is expected to under-perform the DevEx Resources. But the stock apears to be less risky and, when comparing its historical volatility, STRAITS TRADG SD is 9.4 times less risky than DevEx Resources. The stock trades about -0.04 of its potential returns per unit of risk. The DevEx Resources Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7.95 in DevEx Resources Limited on August 27, 2024 and sell it today you would earn a total of 0.15 from holding DevEx Resources Limited or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAITS TRADG SD vs. DevEx Resources Limited
Performance |
| Timeline |
| STRAITS TRADG SD |
| DevEx Resources |
STRAITS TRADG and DevEx Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAITS TRADG and DevEx Resources
The main advantage of trading using opposite STRAITS TRADG and DevEx Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAITS TRADG position performs unexpectedly, DevEx Resources 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 DevEx Resources will offset losses from the drop in DevEx Resources' long position.| STRAITS TRADG vs. Selective Insurance Group | STRAITS TRADG vs. REVO INSURANCE SPA | STRAITS TRADG vs. Ping An Insurance | STRAITS TRADG vs. ARDAGH METAL PACDL 0001 |
| DevEx Resources vs. Xenia Hotels Resorts | DevEx Resources vs. Hyatt Hotels | DevEx Resources vs. COVIVIO HOTELS INH | DevEx Resources vs. Lion Biotechnologies |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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