Correlation Between Pharol SGPS and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Pharol SGPS and Cornish 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 Pharol SGPS and Cornish Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pharol SGPS SA and Cornish Metals, you can compare the effects of market volatilities on Pharol SGPS and Cornish 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 Pharol SGPS with a short position of Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pharol SGPS and Cornish Metals.
Diversification Opportunities for Pharol SGPS and Cornish Metals
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pharol and Cornish is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Pharol SGPS SA and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals and Pharol SGPS 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 Pharol SGPS SA are associated (or correlated) with Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Pharol SGPS i.e., Pharol SGPS and Cornish Metals go up and down completely randomly.
Pair Corralation between Pharol SGPS and Cornish Metals
Assuming the 90 days trading horizon Pharol SGPS SA is expected to generate 0.67 times more return on investment than Cornish Metals. However, Pharol SGPS SA is 1.49 times less risky than Cornish Metals. It trades about 0.0 of its potential returns per unit of risk. Cornish Metals is currently generating about -0.01 per unit of risk. If you would invest 5.43 in Pharol SGPS SA on September 13, 2024 and sell it today you would lose (0.55) from holding Pharol SGPS SA or give up 10.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
Pharol SGPS SA vs. Cornish Metals
Performance |
| Timeline |
| Pharol SGPS SA |
| Cornish Metals |
Pharol SGPS and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pharol SGPS and Cornish Metals
The main advantage of trading using opposite Pharol SGPS and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pharol SGPS position performs unexpectedly, Cornish 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 Cornish Metals will offset losses from the drop in Cornish Metals' long position.| Pharol SGPS vs. CompuGroup Medical AG | Pharol SGPS vs. Jupiter Fund Management | Pharol SGPS vs. Futura Medical | Pharol SGPS vs. Impax Asset Management |
| Cornish Metals vs. Prudential Financial | Cornish Metals vs. Cincinnati Financial Corp | Cornish Metals vs. Bank of Ireland | Cornish Metals vs. Ameriprise Financial |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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