Correlation Between Sandfire Resources and Minbos Resources
Can any of the company-specific risk be diversified away by investing in both Sandfire Resources and Minbos Resources 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 Minbos Resources 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 Minbos Resources, you can compare the effects of market volatilities on Sandfire Resources and Minbos Resources 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 Minbos Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and Minbos Resources.
Diversification Opportunities for Sandfire Resources and Minbos Resources
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sandfire and Minbos is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources NL and Minbos Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minbos Resources 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 Minbos Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minbos Resources has no effect on the direction of Sandfire Resources i.e., Sandfire Resources and Minbos Resources go up and down completely randomly.
Pair Corralation between Sandfire Resources and Minbos Resources
Assuming the 90 days trading horizon Sandfire Resources NL is expected to generate 0.45 times more return on investment than Minbos Resources. However, Sandfire Resources NL is 2.24 times less risky than Minbos Resources. It trades about 0.06 of its potential returns per unit of risk. Minbos Resources is currently generating about 0.0 per unit of risk. If you would invest 543.00 in Sandfire Resources NL on September 24, 2024 and sell it today you would earn a total of 380.00 from holding Sandfire Resources NL or generate 69.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sandfire Resources NL vs. Minbos Resources
Performance |
Timeline |
Sandfire Resources |
Minbos Resources |
Sandfire Resources and Minbos Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sandfire Resources and Minbos Resources
The main advantage of trading using opposite Sandfire Resources and Minbos Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandfire Resources position performs unexpectedly, Minbos Resources 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 Minbos Resources will offset losses from the drop in Minbos Resources' long position.Sandfire Resources vs. Queste Communications | Sandfire Resources vs. Black Rock Mining | Sandfire Resources vs. M3 Mining | Sandfire Resources vs. Perseus 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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