Correlation Between Global Energy and Sayona Mining

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

By analyzing existing cross correlation between Global Energy Metals and Sayona Mining Limited, you can compare the effects of market volatilities on Global Energy 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 Global Energy with a short position of Sayona Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Energy and Sayona Mining.

Diversification Opportunities for Global Energy and Sayona Mining

-0.6

Correlation Coefficient

Global Energy  Sayona Mining

Excellent diversification

The 3 months correlation between Global and Sayona is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Global Energy Metals and Sayona Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona Mining Limited and Global 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 Global Energy Metals 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 Limited has no effect on the direction of Global Energy i.e., Global Energy and Sayona Mining go up and down completely randomly.

Pair Corralation between Global Energy and Sayona Mining

Assuming the 90 days horizon Global Energy Metals is expected to under-perform the Sayona Mining. In addition to that, Global Energy is 1.26 times more volatile than Sayona Mining Limited. It trades about -0.03 of its total potential returns per unit of risk. Sayona Mining Limited is currently generating about 0.08 per unit of volatility. If you would invest  1.60  in Sayona Mining Limited on August 31, 2024 and sell it today you would earn a total of  0.40  from holding Sayona Mining Limited or generate 25.0% return on investment over 90 days.

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

Global Energy Metals  vs.  Sayona Mining Limited

Global Energy Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Energy Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sayona Mining Limited

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sayona Mining Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sayona Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Energy and Sayona Mining

The main advantage of trading using opposite Global Energy and Sayona Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Energy 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.

The idea behind Global Energy Metals and Sayona Mining Limited 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..