Correlation Between Discover Financial and Panther Metals
Can any of the company-specific risk be diversified away by investing in both Discover Financial and Panther 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 Discover Financial and Panther Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and Panther Metals PLC, you can compare the effects of market volatilities on Discover Financial and Panther 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 Discover Financial with a short position of Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and Panther Metals.
Diversification Opportunities for Discover Financial and Panther Metals
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Discover and Panther is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC and Discover Financial 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 Discover Financial Services are associated (or correlated) with Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Discover Financial i.e., Discover Financial and Panther Metals go up and down completely randomly.
Pair Corralation between Discover Financial and Panther Metals
Assuming the 90 days trading horizon Discover Financial Services is expected to generate 0.64 times more return on investment than Panther Metals. However, Discover Financial Services is 1.56 times less risky than Panther Metals. It trades about 0.15 of its potential returns per unit of risk. Panther Metals PLC is currently generating about 0.02 per unit of risk. If you would invest 12,092 in Discover Financial Services on September 1, 2024 and sell it today you would earn a total of 6,151 from holding Discover Financial Services or generate 50.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Discover Financial Services vs. Panther Metals PLC
Performance |
| Timeline |
| Discover Financial |
| Panther Metals PLC |
Discover Financial and Panther Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and Panther Metals
The main advantage of trading using opposite Discover Financial and Panther Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, Panther 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 Panther Metals will offset losses from the drop in Panther Metals' long position.| Discover Financial vs. Uniper SE | Discover Financial vs. Mulberry Group PLC | Discover Financial vs. London Security Plc | Discover Financial vs. Triad Group PLC |
| Panther Metals vs. Givaudan SA | Panther Metals vs. Antofagasta PLC | Panther Metals vs. Centamin PLC | Panther Metals vs. Atalaya Mining |
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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