Correlation Between New Perspective and Metals Creek
Can any of the company-specific risk be diversified away by investing in both New Perspective and Metals Creek 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 New Perspective and Metals Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Metals Creek Resources, you can compare the effects of market volatilities on New Perspective and Metals Creek 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 New Perspective with a short position of Metals Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Metals Creek.
Diversification Opportunities for New Perspective and Metals Creek
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between New and Metals is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding New Perspective Fund and Metals Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Creek Resources and New Perspective 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 New Perspective Fund are associated (or correlated) with Metals Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Creek Resources has no effect on the direction of New Perspective i.e., New Perspective and Metals Creek go up and down completely randomly.
Pair Corralation between New Perspective and Metals Creek
Assuming the 90 days horizon New Perspective is expected to generate 43.2 times less return on investment than Metals Creek. But when comparing it to its historical volatility, New Perspective Fund is 25.21 times less risky than Metals Creek. It trades about 0.06 of its potential returns per unit of risk. Metals Creek Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Metals Creek Resources on October 23, 2024 and sell it today you would earn a total of 0.00 from holding Metals Creek Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Perspective Fund vs. Metals Creek Resources
Performance |
| Timeline |
| New Perspective |
| Metals Creek Resources |
New Perspective and Metals Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Perspective and Metals Creek
The main advantage of trading using opposite New Perspective and Metals Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Metals Creek 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 Metals Creek will offset losses from the drop in Metals Creek's long position.| New Perspective vs. Growth Fund Of | New Perspective vs. American Funds Fundamental | New Perspective vs. Investment Of America | New Perspective vs. Smallcap World Fund |
| Metals Creek vs. Grizzly Discoveries | Metals Creek vs. Greenland Minerals And | Metals Creek vs. First Energy Metals | Metals Creek vs. C3 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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