Correlation Between ACDC Metals and Iodm
Can any of the company-specific risk be diversified away by investing in both ACDC Metals and Iodm 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 ACDC Metals and Iodm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and Iodm, you can compare the effects of market volatilities on ACDC Metals and Iodm 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 ACDC Metals with a short position of Iodm. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and Iodm.
Diversification Opportunities for ACDC Metals and Iodm
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ACDC and Iodm is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals and Iodm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iodm and ACDC 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 ACDC Metals are associated (or correlated) with Iodm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iodm has no effect on the direction of ACDC Metals i.e., ACDC Metals and Iodm go up and down completely randomly.
Pair Corralation between ACDC Metals and Iodm
Assuming the 90 days trading horizon ACDC Metals is expected to under-perform the Iodm. But the stock apears to be less risky and, when comparing its historical volatility, ACDC Metals is 1.19 times less risky than Iodm. The stock trades about -0.44 of its potential returns per unit of risk. The Iodm is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Iodm on September 1, 2024 and sell it today you would lose (2.00) from holding Iodm or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACDC Metals vs. Iodm
Performance |
| Timeline |
| ACDC Metals |
| Iodm |
ACDC Metals and Iodm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and Iodm
The main advantage of trading using opposite ACDC Metals and Iodm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals position performs unexpectedly, Iodm 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 Iodm will offset losses from the drop in Iodm's long position.| ACDC Metals vs. Ironbark Capital | ACDC Metals vs. Phoslock Environmental Technologies | ACDC Metals vs. TPG Telecom | ACDC Metals vs. MotorCycle Holdings |
| Iodm vs. Phoslock Environmental Technologies | Iodm vs. Aurelia Metals | Iodm vs. ACDC Metals | Iodm vs. DY6 Metals |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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