Correlation Between Mitsui Mining and De Grey
Can any of the company-specific risk be diversified away by investing in both Mitsui Mining and De Grey 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 Mitsui Mining and De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsui Mining Smelting and De Grey Mining, you can compare the effects of market volatilities on Mitsui Mining and De Grey 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 Mitsui Mining with a short position of De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsui Mining and De Grey.
Diversification Opportunities for Mitsui Mining and De Grey
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mitsui and DGD is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mitsui Mining Smelting and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining and Mitsui Mining 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 Mitsui Mining Smelting are associated (or correlated) with De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of Mitsui Mining i.e., Mitsui Mining and De Grey go up and down completely randomly.
Pair Corralation between Mitsui Mining and De Grey
Assuming the 90 days horizon Mitsui Mining is expected to generate 1.17 times less return on investment than De Grey. But when comparing it to its historical volatility, Mitsui Mining Smelting is 1.63 times less risky than De Grey. It trades about 0.03 of its potential returns per unit of risk. De Grey Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 96.00 in De Grey Mining on October 4, 2024 and sell it today you would earn a total of 10.00 from holding De Grey Mining or generate 10.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Mitsui Mining Smelting vs. De Grey Mining
Performance |
Timeline |
Mitsui Mining Smelting |
De Grey Mining |
Mitsui Mining and De Grey Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mitsui Mining and De Grey
The main advantage of trading using opposite Mitsui Mining and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsui Mining position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey's long position.Mitsui Mining vs. Constellation Software | Mitsui Mining vs. Jacquet Metal Service | Mitsui Mining vs. SIMS METAL MGT | Mitsui Mining vs. ATOSS SOFTWARE |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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