Correlation Between Sandfire Resources and Nutritional Growth

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

By analyzing existing cross correlation between Sandfire Resources NL and Nutritional Growth Solutions, you can compare the effects of market volatilities on Sandfire Resources and Nutritional Growth 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 Sandfire Resources with a short position of Nutritional Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and Nutritional Growth.

Diversification Opportunities for Sandfire Resources and Nutritional Growth

-0.75

Correlation Coefficient

Sandfire Resources  Nutritional Growth

Pay attention - limited upside

The 3 months correlation between Sandfire and Nutritional is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources NL and Nutritional Growth Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutritional Growth and Sandfire Resources 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 Sandfire Resources NL are associated (or correlated) with Nutritional Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutritional Growth has no effect on the direction of Sandfire Resources i.e., Sandfire Resources and Nutritional Growth go up and down completely randomly.

Pair Corralation between Sandfire Resources and Nutritional Growth

Assuming the 90 days trading horizon Sandfire Resources NL is expected to under-perform the Nutritional Growth. But the stock apears to be less risky and, when comparing its historical volatility, Sandfire Resources NL is 2.49 times less risky than Nutritional Growth. The stock trades about -0.12 of its potential returns per unit of risk. The Nutritional Growth Solutions is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3.60  in Nutritional Growth Solutions on October 2, 2024 and sell it today you would earn a total of  0.90  from holding Nutritional Growth Solutions or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	76.19%
Values	Daily Returns

Sandfire Resources NL  vs.  Nutritional Growth Solutions

Sandfire Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sandfire Resources NL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Nutritional Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutritional Growth Solutions are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Nutritional Growth unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sandfire Resources and Nutritional Growth

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

The idea behind Sandfire Resources NL and Nutritional Growth Solutions 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.