Correlation Between St Galler and European Metals
Can any of the company-specific risk be diversified away by investing in both St Galler 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 St Galler and European Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Galler Kantonalbank and European Metals Holdings, you can compare the effects of market volatilities on St Galler 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 St Galler with a short position of European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and European Metals.
Diversification Opportunities for St Galler and European Metals
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between 0QQZ and European is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank 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 St Galler 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 St Galler Kantonalbank 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 St Galler i.e., St Galler and European Metals go up and down completely randomly.
Pair Corralation between St Galler and European Metals
Assuming the 90 days trading horizon St Galler Kantonalbank is expected to generate 0.22 times more return on investment than European Metals. However, St Galler Kantonalbank is 4.64 times less risky than European Metals. It trades about 0.0 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.17 per unit of risk. If you would invest 43,750 in St Galler Kantonalbank on September 13, 2024 and sell it today you would lose (200.00) from holding St Galler Kantonalbank or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
St Galler Kantonalbank vs. European Metals Holdings
Performance |
| Timeline |
| St Galler Kantonalbank |
| European Metals Holdings |
St Galler and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and European Metals
The main advantage of trading using opposite St Galler and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler 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.| St Galler vs. Samsung Electronics Co | St Galler vs. Samsung Electronics Co | St Galler vs. Hyundai Motor | St Galler vs. Reliance Industries Ltd |
| European Metals vs. Givaudan SA | European Metals vs. Antofagasta PLC | European Metals vs. Ferrexpo PLC | European 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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