Correlation Between ACDC Metals and Itech Minerals
Can any of the company-specific risk be diversified away by investing in both ACDC Metals and Itech Minerals 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 Itech Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and Itech Minerals, you can compare the effects of market volatilities on ACDC Metals and Itech Minerals 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 Itech Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and Itech Minerals.
Diversification Opportunities for ACDC Metals and Itech Minerals
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ACDC and Itech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals and Itech Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itech Minerals 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 Itech Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itech Minerals has no effect on the direction of ACDC Metals i.e., ACDC Metals and Itech Minerals go up and down completely randomly.
Pair Corralation between ACDC Metals and Itech Minerals
Assuming the 90 days trading horizon ACDC Metals is expected to generate 0.58 times more return on investment than Itech Minerals. However, ACDC Metals is 1.74 times less risky than Itech Minerals. It trades about -0.04 of its potential returns per unit of risk. Itech Minerals is currently generating about -0.04 per unit of risk. If you would invest 5.00 in ACDC Metals on December 4, 2024 and sell it today you would lose (0.10) from holding ACDC Metals or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
ACDC Metals vs. Itech Minerals
Performance |
| Timeline |
| ACDC Metals |
| Itech Minerals |
ACDC Metals and Itech Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and Itech Minerals
The main advantage of trading using opposite ACDC Metals and Itech Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals position performs unexpectedly, Itech Minerals 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 Itech Minerals will offset losses from the drop in Itech Minerals' long position.| ACDC Metals vs. Charter Hall Education | ACDC Metals vs. Embark Education Group | ACDC Metals vs. Iron Road | ACDC Metals vs. MetalsGrove Mining |
| Itech Minerals vs. Microequities Asset Management | Itech Minerals vs. K2 Asset Management | Itech Minerals vs. Ramsay Health Care | Itech Minerals vs. Clime Investment Management |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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