Correlation Between ADRIATIC METALS and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO 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 IMPERIAL TOBACCO , you can compare the effects of market volatilities on ADRIATIC METALS and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and IMPERIAL TOBACCO.
Diversification Opportunities for ADRIATIC METALS and IMPERIAL TOBACCO
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ADRIATIC and IMPERIAL is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of ADRIATIC METALS i.e., ADRIATIC METALS and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and IMPERIAL TOBACCO
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to under-perform the IMPERIAL TOBACCO. In addition to that, ADRIATIC METALS is 2.78 times more volatile than IMPERIAL TOBACCO . It trades about -0.02 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.39 per unit of volatility. If you would invest 2,812 in IMPERIAL TOBACCO on September 19, 2024 and sell it today you would earn a total of 285.00 from holding IMPERIAL TOBACCO or generate 10.14% 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. IMPERIAL TOBACCO
Performance |
| Timeline |
| ADRIATIC METALS LS |
| IMPERIAL TOBACCO |
ADRIATIC METALS and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and IMPERIAL TOBACCO
The main advantage of trading using opposite ADRIATIC METALS and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| ADRIATIC METALS vs. LG Display Co | ADRIATIC METALS vs. Hemisphere Energy Corp | ADRIATIC METALS vs. Spirent Communications plc | ADRIATIC METALS vs. Cogent Communications Holdings |
| IMPERIAL TOBACCO vs. Evolution Mining Limited | IMPERIAL TOBACCO vs. Harmony Gold Mining | IMPERIAL TOBACCO vs. ADRIATIC METALS LS 013355 | IMPERIAL TOBACCO vs. Aegean Airlines 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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