Correlation Between TRAINLINE PLC and Freeport McMoRan
Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and Freeport McMoRan 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 TRAINLINE PLC and Freeport McMoRan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAINLINE PLC LS and Freeport McMoRan, you can compare the effects of market volatilities on TRAINLINE PLC and Freeport McMoRan 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 TRAINLINE PLC with a short position of Freeport McMoRan. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Freeport McMoRan.
Diversification Opportunities for TRAINLINE PLC and Freeport McMoRan
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TRAINLINE and Freeport is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and Freeport McMoRan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoRan and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with Freeport McMoRan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoRan has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and Freeport McMoRan go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and Freeport McMoRan
Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to generate 1.19 times more return on investment than Freeport McMoRan. However, TRAINLINE PLC is 1.19 times more volatile than Freeport McMoRan. It trades about 0.04 of its potential returns per unit of risk. Freeport McMoRan is currently generating about 0.01 per unit of risk. If you would invest 338.00 in TRAINLINE PLC LS on October 11, 2024 and sell it today you would earn a total of 158.00 from holding TRAINLINE PLC LS or generate 46.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAINLINE PLC LS vs. Freeport McMoRan
Performance |
| Timeline |
| TRAINLINE PLC LS |
| Freeport McMoRan |
TRAINLINE PLC and Freeport McMoRan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAINLINE PLC and Freeport McMoRan
The main advantage of trading using opposite TRAINLINE PLC and Freeport McMoRan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC position performs unexpectedly, Freeport McMoRan 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 Freeport McMoRan will offset losses from the drop in Freeport McMoRan's long position.| TRAINLINE PLC vs. LOANDEPOT INC A | TRAINLINE PLC vs. Information Services International Dentsu | TRAINLINE PLC vs. Cass Information Systems | TRAINLINE PLC vs. Zoom Video Communications |
| Freeport McMoRan vs. SAFEROADS HLDGS | Freeport McMoRan vs. TRAINLINE PLC LS | Freeport McMoRan vs. CHINA SOUTHN AIR H | Freeport McMoRan vs. ALTAIR RES INC |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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