Correlation Between De Grey and ANGANG STEEL

Can any of the company-specific risk be diversified away by investing in both De Grey and ANGANG STEEL 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 ANGANG STEEL 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 ANGANG STEEL H , you can compare the effects of market volatilities on De Grey and ANGANG STEEL 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 ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and ANGANG STEEL.

Diversification Opportunities for De Grey and ANGANG STEEL

0.24

Correlation Coefficient

De Grey  ANGANG STEEL

Modest diversification

The 3 months correlation between DGD and ANGANG is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H 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 ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of De Grey i.e., De Grey and ANGANG STEEL go up and down completely randomly.

Pair Corralation between De Grey and ANGANG STEEL

Assuming the 90 days trading horizon De Grey Mining is expected to under-perform the ANGANG STEEL. But the stock apears to be less risky and, when comparing its historical volatility, De Grey Mining is 1.39 times less risky than ANGANG STEEL. The stock trades about -0.13 of its potential returns per unit of risk. The ANGANG STEEL H is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  19.00  in ANGANG STEEL H on October 10, 2024 and sell it today you would lose (1.00) from holding ANGANG STEEL H or give up 5.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

De Grey Mining  vs.  ANGANG STEEL H

De Grey Mining

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in De Grey Mining are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, De Grey unveiled solid returns over the last few months and may actually be approaching a breakup point.

ANGANG STEEL H

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANGANG STEEL H are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ANGANG STEEL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with De Grey and ANGANG STEEL

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

The idea behind De Grey Mining and ANGANG STEEL H 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 Commodity Directory module to find actively traded commodities issued by global exchanges.