Correlation Between Cembra Money and European Metals
Can any of the company-specific risk be diversified away by investing in both Cembra Money and European 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 Cembra Money and European Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and European Metals Holdings, you can compare the effects of market volatilities on Cembra Money and European 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 Cembra Money with a short position of European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and European Metals.
Diversification Opportunities for Cembra Money and European Metals
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cembra and European is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings and Cembra Money 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 Cembra Money Bank are associated (or correlated) with European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Cembra Money i.e., Cembra Money and European Metals go up and down completely randomly.
Pair Corralation between Cembra Money and European Metals
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 0.23 times more return on investment than European Metals. However, Cembra Money Bank is 4.27 times less risky than European Metals. It trades about 0.12 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.09 per unit of risk. If you would invest 6,257 in Cembra Money Bank on September 12, 2024 and sell it today you would earn a total of 2,148 from holding Cembra Money Bank or generate 34.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.81% |
| Values | Daily Returns |
Cembra Money Bank vs. European Metals Holdings
Performance |
| Timeline |
| Cembra Money Bank |
| European Metals Holdings |
Cembra Money and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and European Metals
The main advantage of trading using opposite Cembra Money and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, European 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 European Metals will offset losses from the drop in European Metals' long position.| Cembra Money vs. Hong Kong Land | Cembra Money vs. Neometals | Cembra Money vs. Coor Service Management | Cembra Money vs. Fidelity Sustainable USD |
| European Metals vs. National Bank of | European Metals vs. Alior Bank SA | European Metals vs. Solstad Offshore ASA | European Metals vs. St Galler Kantonalbank |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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