Correlation Between Generation Mining and Australian Vanadium

Can any of the company-specific risk be diversified away by investing in both Generation Mining and Australian Vanadium 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 Generation Mining and Australian Vanadium into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Generation Mining Limited and Australian Vanadium Limited, you can compare the effects of market volatilities on Generation Mining and Australian Vanadium 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 Generation Mining with a short position of Australian Vanadium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Mining and Australian Vanadium.

Diversification Opportunities for Generation Mining and Australian Vanadium

-0.18

Correlation Coefficient

Generation Mining  Australian Vanadium

Good diversification

The 3 months correlation between Generation and Australian is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Generation Mining Limited and Australian Vanadium Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Vanadium and Generation 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 Generation Mining Limited are associated (or correlated) with Australian Vanadium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Vanadium has no effect on the direction of Generation Mining i.e., Generation Mining and Australian Vanadium go up and down completely randomly.

Pair Corralation between Generation Mining and Australian Vanadium

Assuming the 90 days horizon Generation Mining is expected to generate 3.89 times less return on investment than Australian Vanadium. But when comparing it to its historical volatility, Generation Mining Limited is 5.41 times less risky than Australian Vanadium. It trades about 0.18 of its potential returns per unit of risk. Australian Vanadium Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.72  in Australian Vanadium Limited on July 10, 2025 and sell it today you would earn a total of  0.28  from holding Australian Vanadium Limited or generate 38.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Generation Mining Limited  vs.  Australian Vanadium Limited

Generation Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Generation Mining Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal primary indicators, Generation Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Australian Vanadium

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Australian Vanadium Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Australian Vanadium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Generation Mining and Australian Vanadium

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

The idea behind Generation Mining Limited and Australian Vanadium Limited 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.