Correlation Between AiMedia Technologies and Metro Mining
Can any of the company-specific risk be diversified away by investing in both AiMedia Technologies and Metro Mining 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 AiMedia Technologies and Metro Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AiMedia Technologies and Metro Mining, you can compare the effects of market volatilities on AiMedia Technologies and Metro Mining 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 AiMedia Technologies with a short position of Metro Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of AiMedia Technologies and Metro Mining.
Diversification Opportunities for AiMedia Technologies and Metro Mining
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AiMedia and Metro is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding AiMedia Technologies and Metro Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Mining and AiMedia Technologies 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 AiMedia Technologies are associated (or correlated) with Metro Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Mining has no effect on the direction of AiMedia Technologies i.e., AiMedia Technologies and Metro Mining go up and down completely randomly.
Pair Corralation between AiMedia Technologies and Metro Mining
Assuming the 90 days trading horizon AiMedia Technologies is expected to under-perform the Metro Mining. In addition to that, AiMedia Technologies is 1.62 times more volatile than Metro Mining. It trades about -0.04 of its total potential returns per unit of risk. Metro Mining is currently generating about 0.32 per unit of volatility. If you would invest 4.80 in Metro Mining on September 13, 2024 and sell it today you would earn a total of 1.20 from holding Metro Mining or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AiMedia Technologies vs. Metro Mining
Performance |
| Timeline |
| AiMedia Technologies |
| Metro Mining |
AiMedia Technologies and Metro Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AiMedia Technologies and Metro Mining
The main advantage of trading using opposite AiMedia Technologies and Metro Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AiMedia Technologies position performs unexpectedly, Metro Mining 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 Metro Mining will offset losses from the drop in Metro Mining's long position.| AiMedia Technologies vs. Audio Pixels Holdings | AiMedia Technologies vs. Iodm | AiMedia Technologies vs. Nsx | AiMedia Technologies vs. TTG Fintech |
| Metro Mining vs. Charter Hall Retail | Metro Mining vs. TTG Fintech | Metro Mining vs. Genetic Technologies | Metro Mining vs. Patriot Battery 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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