Correlation Between Freeport McMoRan and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Freeport McMoRan and Bankers Investment 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 Freeport McMoRan and Bankers Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freeport McMoRan and Bankers Investment Trust, you can compare the effects of market volatilities on Freeport McMoRan and Bankers Investment 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 Freeport McMoRan with a short position of Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freeport McMoRan and Bankers Investment.
Diversification Opportunities for Freeport McMoRan and Bankers Investment
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Freeport and Bankers is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Freeport McMoRan and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust and Freeport McMoRan 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 Freeport McMoRan are associated (or correlated) with Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Freeport McMoRan i.e., Freeport McMoRan and Bankers Investment go up and down completely randomly.
Pair Corralation between Freeport McMoRan and Bankers Investment
Assuming the 90 days trading horizon Freeport McMoRan is expected to generate 1.01 times less return on investment than Bankers Investment. In addition to that, Freeport McMoRan is 2.79 times more volatile than Bankers Investment Trust. It trades about 0.01 of its total potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.04 per unit of volatility. If you would invest 9,935 in Bankers Investment Trust on September 24, 2024 and sell it today you would earn a total of 1,465 from holding Bankers Investment Trust or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Freeport McMoRan vs. Bankers Investment Trust
Performance |
| Timeline |
| Freeport McMoRan |
| Bankers Investment Trust |
Freeport McMoRan and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freeport McMoRan and Bankers Investment
The main advantage of trading using opposite Freeport McMoRan and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freeport McMoRan position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Freeport McMoRan vs. Lowland Investment Co | Freeport McMoRan vs. Supermarket Income REIT | Freeport McMoRan vs. Aberdeen Diversified Income | Freeport McMoRan vs. Bankers Investment Trust |
| Bankers Investment vs. Samsung Electronics Co | Bankers Investment vs. Samsung Electronics Co | Bankers Investment vs. Hyundai Motor | Bankers Investment vs. Toyota Motor Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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