Correlation Between De Grey and Mount Gibson

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both De Grey and Mount Gibson 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 De Grey and Mount Gibson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and Mount Gibson Iron, you can compare the effects of market volatilities on De Grey and Mount Gibson 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 De Grey with a short position of Mount Gibson. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Mount Gibson.

Diversification Opportunities for De Grey and Mount Gibson

0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between DEG and Mount is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Mount Gibson Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mount Gibson Iron and De Grey 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 De Grey Mining are associated (or correlated) with Mount Gibson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mount Gibson Iron has no effect on the direction of De Grey i.e., De Grey and Mount Gibson go up and down completely randomly.

Pair Corralation between De Grey and Mount Gibson

Assuming the 90 days trading horizon De Grey Mining is expected to generate 2.79 times more return on investment than Mount Gibson. However, De Grey is 2.79 times more volatile than Mount Gibson Iron. It trades about 0.23 of its potential returns per unit of risk. Mount Gibson Iron is currently generating about 0.01 per unit of risk. If you would invest  141.00  in De Grey Mining on September 18, 2024 and sell it today you would earn a total of  47.00  from holding De Grey Mining or generate 33.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

De Grey Mining  vs.  Mount Gibson Iron

 Performance 
       Timeline  
De Grey Mining 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in De Grey Mining are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, De Grey unveiled solid returns over the last few months and may actually be approaching a breakup point.
Mount Gibson Iron 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Mount Gibson Iron are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mount Gibson is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

De Grey and Mount Gibson Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with De Grey and Mount Gibson

The main advantage of trading using opposite De Grey and Mount Gibson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey position performs unexpectedly, Mount Gibson 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 Mount Gibson will offset losses from the drop in Mount Gibson's long position.
The idea behind De Grey Mining and Mount Gibson Iron 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.
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 CEOs Directory module to screen CEOs from public companies around the world.

Other Complementary Tools

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges