Correlation Between Abingdon Health and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Abingdon Health and Cornish Metals 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 Abingdon Health and Cornish Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abingdon Health Plc and Cornish Metals, you can compare the effects of market volatilities on Abingdon Health and Cornish Metals 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 Abingdon Health with a short position of Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abingdon Health and Cornish Metals.
Diversification Opportunities for Abingdon Health and Cornish Metals
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Abingdon and Cornish is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Abingdon Health Plc and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals and Abingdon Health 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 Abingdon Health Plc are associated (or correlated) with Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Abingdon Health i.e., Abingdon Health and Cornish Metals go up and down completely randomly.
Pair Corralation between Abingdon Health and Cornish Metals
Assuming the 90 days trading horizon Abingdon Health Plc is expected to under-perform the Cornish Metals. But the stock apears to be less risky and, when comparing its historical volatility, Abingdon Health Plc is 2.19 times less risky than Cornish Metals. The stock trades about -0.21 of its potential returns per unit of risk. The Cornish Metals is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 945.00 in Cornish Metals on August 31, 2024 and sell it today you would lose (75.00) from holding Cornish Metals or give up 7.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abingdon Health Plc vs. Cornish Metals
Performance |
| Timeline |
| Abingdon Health Plc |
| Cornish Metals |
Abingdon Health and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abingdon Health and Cornish Metals
The main advantage of trading using opposite Abingdon Health and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abingdon Health position performs unexpectedly, Cornish Metals 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 Cornish Metals will offset losses from the drop in Cornish Metals' long position.| Abingdon Health vs. Toyota Motor Corp | Abingdon Health vs. SoftBank Group Corp | Abingdon Health vs. State Bank of | Abingdon Health vs. MOL Hungarian Oil |
| Cornish Metals vs. Centamin PLC | Cornish Metals vs. Central Asia Metals | Cornish Metals vs. Anglo Asian Mining | Cornish Metals vs. Metals Exploration Plc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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