Correlation Between Aftermath Silver and Ferroglobe PLC
Can any of the company-specific risk be diversified away by investing in both Aftermath Silver and Ferroglobe 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 Aftermath Silver and Ferroglobe PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aftermath Silver and Ferroglobe PLC, you can compare the effects of market volatilities on Aftermath Silver and Ferroglobe 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 Aftermath Silver with a short position of Ferroglobe PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aftermath Silver and Ferroglobe PLC.
Diversification Opportunities for Aftermath Silver and Ferroglobe PLC
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aftermath and Ferroglobe is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aftermath Silver and Ferroglobe PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferroglobe PLC and Aftermath Silver 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 Aftermath Silver are associated (or correlated) with Ferroglobe PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferroglobe PLC has no effect on the direction of Aftermath Silver i.e., Aftermath Silver and Ferroglobe PLC go up and down completely randomly.
Pair Corralation between Aftermath Silver and Ferroglobe PLC
Assuming the 90 days horizon Aftermath Silver is expected to generate 2.53 times more return on investment than Ferroglobe PLC. However, Aftermath Silver is 2.53 times more volatile than Ferroglobe PLC. It trades about 0.09 of its potential returns per unit of risk. Ferroglobe PLC is currently generating about -0.01 per unit of risk. If you would invest 14.00 in Aftermath Silver on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Aftermath Silver or generate 128.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aftermath Silver vs. Ferroglobe PLC
Performance |
| Timeline |
| Aftermath Silver |
| Ferroglobe PLC |
Aftermath Silver and Ferroglobe PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aftermath Silver and Ferroglobe PLC
The main advantage of trading using opposite Aftermath Silver and Ferroglobe PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aftermath Silver position performs unexpectedly, Ferroglobe 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 Ferroglobe PLC will offset losses from the drop in Ferroglobe PLC's long position.| Aftermath Silver vs. Ascendant Resources | Aftermath Silver vs. Nevada King Gold | Aftermath Silver vs. Fathom Nickel | Aftermath Silver vs. Wallbridge Mining |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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