Correlation Between 29Metals and CUE Energy
Can any of the company-specific risk be diversified away by investing in both 29Metals and CUE Energy 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 29Metals and CUE Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 29Metals and CUE Energy Resources, you can compare the effects of market volatilities on 29Metals and CUE Energy 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 29Metals with a short position of CUE Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of 29Metals and CUE Energy.
Diversification Opportunities for 29Metals and CUE Energy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between 29Metals and CUE is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding 29Metals and CUE Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CUE Energy Resources and 29Metals 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 29Metals are associated (or correlated) with CUE Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CUE Energy Resources has no effect on the direction of 29Metals i.e., 29Metals and CUE Energy go up and down completely randomly.
Pair Corralation between 29Metals and CUE Energy
Assuming the 90 days trading horizon 29Metals is expected to generate 0.58 times more return on investment than CUE Energy. However, 29Metals is 1.73 times less risky than CUE Energy. It trades about -0.16 of its potential returns per unit of risk. CUE Energy Resources is currently generating about -0.12 per unit of risk. If you would invest 42.00 in 29Metals on September 1, 2024 and sell it today you would lose (5.00) from holding 29Metals or give up 11.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
29Metals vs. CUE Energy Resources
Performance |
| Timeline |
| 29Metals |
| CUE Energy Resources |
29Metals and CUE Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 29Metals and CUE Energy
The main advantage of trading using opposite 29Metals and CUE Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 29Metals position performs unexpectedly, CUE Energy 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 CUE Energy will offset losses from the drop in CUE Energy's long position.| 29Metals vs. Northern Star Resources | 29Metals vs. Evolution Mining | 29Metals vs. Bluescope Steel | 29Metals vs. Sandfire Resources NL |
| CUE Energy vs. 29Metals | CUE Energy vs. Perseus Mining | CUE Energy vs. The Environmental Group | CUE Energy vs. Champion Iron |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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