Correlation Between Adriatic Metals and SPDR SPASX
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals and SPDR SPASX 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 SPDR SPASX 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 SPDR SPASX 200, you can compare the effects of market volatilities on Adriatic Metals and SPDR SPASX 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 SPDR SPASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and SPDR SPASX.
Diversification Opportunities for Adriatic Metals and SPDR SPASX
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adriatic and SPDR is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals Plc and SPDR SPASX 200 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SPASX 200 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 SPDR SPASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SPASX 200 has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and SPDR SPASX go up and down completely randomly.
Pair Corralation between Adriatic Metals and SPDR SPASX
Assuming the 90 days trading horizon Adriatic Metals Plc is expected to generate 4.16 times more return on investment than SPDR SPASX. However, Adriatic Metals is 4.16 times more volatile than SPDR SPASX 200. It trades about 0.04 of its potential returns per unit of risk. SPDR SPASX 200 is currently generating about 0.08 per unit of risk. If you would invest 358.00 in Adriatic Metals Plc on August 29, 2024 and sell it today you would earn a total of 52.00 from holding Adriatic Metals Plc or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adriatic Metals Plc vs. SPDR SPASX 200
Performance |
| Timeline |
| Adriatic Metals Plc |
| SPDR SPASX 200 |
Adriatic Metals and SPDR SPASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and SPDR SPASX
The main advantage of trading using opposite Adriatic Metals and SPDR SPASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals position performs unexpectedly, SPDR SPASX 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 SPDR SPASX will offset losses from the drop in SPDR SPASX's long position.| Adriatic Metals vs. Queste Communications | Adriatic Metals vs. Perseus Mining | Adriatic Metals vs. Talisman Mining | Adriatic Metals vs. Land Homes Group |
| SPDR SPASX vs. SPDR SPASX 200 | SPDR SPASX vs. SPDR SPASX 50 | SPDR SPASX vs. SPDR MSCI World | SPDR SPASX vs. SPDR Dow Jones |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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