Correlation Between NEW PACIFIC and Fresnillo Plc
Can any of the company-specific risk be diversified away by investing in both NEW PACIFIC and Fresnillo Plc 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 NEW PACIFIC and Fresnillo Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEW PACIFIC METALS and Fresnillo plc, you can compare the effects of market volatilities on NEW PACIFIC and Fresnillo Plc 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 NEW PACIFIC with a short position of Fresnillo Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW PACIFIC and Fresnillo Plc.
Diversification Opportunities for NEW PACIFIC and Fresnillo Plc
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NEW and Fresnillo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NEW PACIFIC METALS and Fresnillo plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresnillo plc and NEW PACIFIC 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 NEW PACIFIC METALS are associated (or correlated) with Fresnillo Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresnillo plc has no effect on the direction of NEW PACIFIC i.e., NEW PACIFIC and Fresnillo Plc go up and down completely randomly.
Pair Corralation between NEW PACIFIC and Fresnillo Plc
Assuming the 90 days trading horizon NEW PACIFIC METALS is expected to under-perform the Fresnillo Plc. In addition to that, NEW PACIFIC is 1.51 times more volatile than Fresnillo plc. It trades about -0.01 of its total potential returns per unit of risk. Fresnillo plc is currently generating about -0.01 per unit of volatility. If you would invest 987.00 in Fresnillo plc on September 24, 2024 and sell it today you would lose (234.00) from holding Fresnillo plc or give up 23.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEW PACIFIC METALS vs. Fresnillo plc
Performance |
| Timeline |
| NEW PACIFIC METALS |
| Fresnillo plc |
NEW PACIFIC and Fresnillo Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEW PACIFIC and Fresnillo Plc
The main advantage of trading using opposite NEW PACIFIC and Fresnillo Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEW PACIFIC position performs unexpectedly, Fresnillo Plc 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 Fresnillo Plc will offset losses from the drop in Fresnillo Plc's long position.| NEW PACIFIC vs. Fresnillo plc | NEW PACIFIC vs. THARISA NON LIST | NEW PACIFIC vs. SYLVANIA PLAT DL | NEW PACIFIC vs. Gemfields Group Limited |
| Fresnillo Plc vs. NEW PACIFIC METALS | Fresnillo Plc vs. THARISA NON LIST | Fresnillo Plc vs. SYLVANIA PLAT DL | Fresnillo Plc vs. Gemfields Group Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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