Correlation Between De Grey and Suncorp

Can any of the company-specific risk be diversified away by investing in both De Grey and Suncorp 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 De Grey and Suncorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between De Grey Mining and Suncorp Group, you can compare the effects of market volatilities on De Grey and Suncorp 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 De Grey with a short position of Suncorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Suncorp.

Diversification Opportunities for De Grey and Suncorp

-0.06

Correlation Coefficient

De Grey  Suncorp

Good diversification

The 3 months correlation between DEG and Suncorp is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Suncorp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group and De Grey 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 De Grey Mining are associated (or correlated) with Suncorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncorp Group has no effect on the direction of De Grey i.e., De Grey and Suncorp go up and down completely randomly.

Pair Corralation between De Grey and Suncorp

Assuming the 90 days trading horizon De Grey Mining is expected to generate 0.49 times more return on investment than Suncorp. However, De Grey Mining is 2.03 times less risky than Suncorp. It trades about -0.05 of its potential returns per unit of risk. Suncorp Group is currently generating about -0.19 per unit of risk. If you would invest  206.00  in De Grey Mining on December 10, 2024 and sell it today you would lose (5.00) from holding De Grey Mining or give up 2.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

De Grey Mining  vs.  Suncorp Group

De Grey Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in De Grey Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, De Grey is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Suncorp Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Suncorp Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with De Grey and Suncorp

The main advantage of trading using opposite De Grey and Suncorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Suncorp 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 Suncorp will offset losses from the drop in Suncorp's long position.

The idea behind De Grey Mining and Suncorp Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.