Correlation Between Arbor Metals and Equitable
Can any of the company-specific risk be diversified away by investing in both Arbor Metals and Equitable 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 Arbor Metals and Equitable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arbor Metals Corp and Equitable Group, you can compare the effects of market volatilities on Arbor Metals and Equitable 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 Arbor Metals with a short position of Equitable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Metals and Equitable.
Diversification Opportunities for Arbor Metals and Equitable
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arbor and Equitable is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp and Equitable Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Group and Arbor 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 Arbor Metals Corp are associated (or correlated) with Equitable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Group has no effect on the direction of Arbor Metals i.e., Arbor Metals and Equitable go up and down completely randomly.
Pair Corralation between Arbor Metals and Equitable
Assuming the 90 days horizon Arbor Metals Corp is expected to generate 12.7 times more return on investment than Equitable. However, Arbor Metals is 12.7 times more volatile than Equitable Group. It trades about 0.16 of its potential returns per unit of risk. Equitable Group is currently generating about 0.03 per unit of risk. If you would invest 34.00 in Arbor Metals Corp on November 8, 2024 and sell it today you would earn a total of 13.00 from holding Arbor Metals Corp or generate 38.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arbor Metals Corp vs. Equitable Group
Performance |
| Timeline |
| Arbor Metals Corp |
| Equitable Group |
Arbor Metals and Equitable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arbor Metals and Equitable
The main advantage of trading using opposite Arbor Metals and Equitable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals position performs unexpectedly, Equitable 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 Equitable will offset losses from the drop in Equitable's long position.| Arbor Metals vs. Kiplin Metals | Arbor Metals vs. Pure Energy Minerals | Arbor Metals vs. Noram Lithium Corp | Arbor Metals vs. Minnova Corp |
| Equitable vs. goeasy | Equitable vs. Canadian Western Bank | Equitable vs. TFI International | Equitable vs. Intact Financial |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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