Correlation Between Sayona Mining and Anax Metals
Can any of the company-specific risk be diversified away by investing in both Sayona Mining and Anax Metals 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 Sayona Mining and Anax Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sayona Mining and Anax Metals, you can compare the effects of market volatilities on Sayona Mining and Anax Metals 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 Sayona Mining with a short position of Anax Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sayona Mining and Anax Metals.
Diversification Opportunities for Sayona Mining and Anax Metals
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sayona and Anax is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sayona Mining and Anax Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anax Metals and Sayona 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 Sayona Mining are associated (or correlated) with Anax Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anax Metals has no effect on the direction of Sayona Mining i.e., Sayona Mining and Anax Metals go up and down completely randomly.
Pair Corralation between Sayona Mining and Anax Metals
Assuming the 90 days trading horizon Sayona Mining is expected to under-perform the Anax Metals. But the stock apears to be less risky and, when comparing its historical volatility, Sayona Mining is 1.44 times less risky than Anax Metals. The stock trades about -0.07 of its potential returns per unit of risk. The Anax Metals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.10 in Anax Metals on October 9, 2024 and sell it today you would earn a total of 0.10 from holding Anax Metals or generate 9.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sayona Mining vs. Anax Metals
Performance |
Timeline |
Sayona Mining |
Anax Metals |
Sayona Mining and Anax Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sayona Mining and Anax Metals
The main advantage of trading using opposite Sayona Mining and Anax Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sayona Mining position performs unexpectedly, Anax Metals 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 Anax Metals will offset losses from the drop in Anax Metals' long position.Sayona Mining vs. Northern Star Resources | Sayona Mining vs. Evolution Mining | Sayona Mining vs. Bluescope Steel | Sayona Mining vs. De Grey Mining |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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