Correlation Between St Galler and Metals Exploration
Can any of the company-specific risk be diversified away by investing in both St Galler and Metals Exploration 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 Metals Exploration 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 Metals Exploration Plc, you can compare the effects of market volatilities on St Galler and Metals Exploration 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 Metals Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and Metals Exploration.
Diversification Opportunities for St Galler and Metals Exploration
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 0QQZ and Metals is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and Metals Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Exploration Plc 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 Metals Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Exploration Plc has no effect on the direction of St Galler i.e., St Galler and Metals Exploration go up and down completely randomly.
Pair Corralation between St Galler and Metals Exploration
Assuming the 90 days trading horizon St Galler is expected to generate 2.88 times less return on investment than Metals Exploration. But when comparing it to its historical volatility, St Galler Kantonalbank is 5.75 times less risky than Metals Exploration. It trades about 0.3 of its potential returns per unit of risk. Metals Exploration Plc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 536.00 in Metals Exploration Plc on October 30, 2024 and sell it today you would earn a total of 58.00 from holding Metals Exploration Plc or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Galler Kantonalbank vs. Metals Exploration Plc
Performance |
| Timeline |
| St Galler Kantonalbank |
| Metals Exploration Plc |
St Galler and Metals Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and Metals Exploration
The main advantage of trading using opposite St Galler and Metals Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler position performs unexpectedly, Metals Exploration 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 Metals Exploration will offset losses from the drop in Metals Exploration's long position.| St Galler vs. CVS Health Corp | St Galler vs. SoftBank Group Corp | St Galler vs. Abingdon Health Plc | St Galler vs. Liechtensteinische Landesbank AG |
| Metals Exploration vs. SMA Solar Technology | Metals Exploration vs. Teradata Corp | Metals Exploration vs. DXC Technology Co | Metals Exploration vs. Axway Software SA |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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