Correlation Between Adriatic Metals and Clime Investment
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals and Clime Investment 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 Adriatic Metals and Clime Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals Plc and Clime Investment Management, you can compare the effects of market volatilities on Adriatic Metals and Clime Investment 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 Adriatic Metals with a short position of Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Clime Investment.
Diversification Opportunities for Adriatic Metals and Clime Investment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adriatic and Clime is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals Plc and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man and Adriatic 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 Adriatic Metals Plc are associated (or correlated) with Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and Clime Investment go up and down completely randomly.
Pair Corralation between Adriatic Metals and Clime Investment
Assuming the 90 days trading horizon Adriatic Metals Plc is expected to generate 1.43 times more return on investment than Clime Investment. However, Adriatic Metals is 1.43 times more volatile than Clime Investment Management. It trades about 0.03 of its potential returns per unit of risk. Clime Investment Management is currently generating about -0.01 per unit of risk. If you would invest 328.00 in Adriatic Metals Plc on September 4, 2024 and sell it today you would earn a total of 80.00 from holding Adriatic Metals Plc or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adriatic Metals Plc vs. Clime Investment Management
Performance |
| Timeline |
| Adriatic Metals Plc |
| Clime Investment Man |
Adriatic Metals and Clime Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and Clime Investment
The main advantage of trading using opposite Adriatic Metals and Clime Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals position performs unexpectedly, Clime Investment 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 Clime Investment will offset losses from the drop in Clime Investment's long position.| Adriatic Metals vs. Hansen Technologies | Adriatic Metals vs. Neurotech International | Adriatic Metals vs. WiseTech Global Limited | Adriatic Metals vs. Qbe Insurance Group |
| Clime Investment vs. Westpac Banking | Clime Investment vs. Ecofibre | Clime Investment vs. Adriatic Metals Plc | Clime Investment vs. Australian Dairy Farms |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |