Correlation Between ADRIATIC METALS and Postal Savings
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS and Postal Savings 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 ADRIATIC METALS and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and Postal Savings Bank, you can compare the effects of market volatilities on ADRIATIC METALS and Postal Savings 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 ADRIATIC METALS with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and Postal Savings.
Diversification Opportunities for ADRIATIC METALS and Postal Savings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ADRIATIC and Postal is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of ADRIATIC METALS i.e., ADRIATIC METALS and Postal Savings go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and Postal Savings
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 1.78 times more return on investment than Postal Savings. However, ADRIATIC METALS is 1.78 times more volatile than Postal Savings Bank. It trades about 0.15 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.09 per unit of risk. If you would invest 171.00 in ADRIATIC METALS LS 013355 on September 2, 2024 and sell it today you would earn a total of 75.00 from holding ADRIATIC METALS LS 013355 or generate 43.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. Postal Savings Bank
Performance |
| Timeline |
| ADRIATIC METALS LS |
| Postal Savings Bank |
ADRIATIC METALS and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and Postal Savings
The main advantage of trading using opposite ADRIATIC METALS and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| ADRIATIC METALS vs. NAKED WINES PLC | ADRIATIC METALS vs. China BlueChemical | ADRIATIC METALS vs. Eastman Chemical | ADRIATIC METALS vs. United Rentals |
| Postal Savings vs. TERADATA | Postal Savings vs. DATANG INTL POW | Postal Savings vs. National Storage Affiliates | Postal Savings vs. INFORMATION SVC GRP |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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