Correlation Between Suncorp and Prodigy Gold
Can any of the company-specific risk be diversified away by investing in both Suncorp and Prodigy Gold 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 Suncorp and Prodigy Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncorp Group and Prodigy Gold NL, you can compare the effects of market volatilities on Suncorp and Prodigy Gold 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 Suncorp with a short position of Prodigy Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncorp and Prodigy Gold.
Diversification Opportunities for Suncorp and Prodigy Gold
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Suncorp and Prodigy is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Suncorp Group and Prodigy Gold NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodigy Gold NL and Suncorp 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 Suncorp Group are associated (or correlated) with Prodigy Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodigy Gold NL has no effect on the direction of Suncorp i.e., Suncorp and Prodigy Gold go up and down completely randomly.
Pair Corralation between Suncorp and Prodigy Gold
Assuming the 90 days trading horizon Suncorp Group is expected to under-perform the Prodigy Gold. But the stock apears to be less risky and, when comparing its historical volatility, Suncorp Group is 3.96 times less risky than Prodigy Gold. The stock trades about -0.07 of its potential returns per unit of risk. The Prodigy Gold NL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.20 in Prodigy Gold NL on December 28, 2024 and sell it today you would earn a total of 0.00 from holding Prodigy Gold NL or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Suncorp Group vs. Prodigy Gold NL
Performance |
Timeline |
Suncorp Group |
Prodigy Gold NL |
Suncorp and Prodigy Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Suncorp and Prodigy Gold
The main advantage of trading using opposite Suncorp and Prodigy Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncorp position performs unexpectedly, Prodigy Gold 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 Prodigy Gold will offset losses from the drop in Prodigy Gold's long position.The idea behind Suncorp Group and Prodigy Gold NL 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.Prodigy Gold vs. FireFly Metals | Prodigy Gold vs. Ainsworth Game Technology | Prodigy Gold vs. Thorney Technologies | Prodigy Gold vs. Hammer Metals |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |