Correlation Between Alien Metals and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both Alien Metals and Eastern Platinum 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 Alien Metals and Eastern Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alien Metals and Eastern Platinum Limited, you can compare the effects of market volatilities on Alien Metals and Eastern Platinum 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 Alien Metals with a short position of Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alien Metals and Eastern Platinum.
Diversification Opportunities for Alien Metals and Eastern Platinum
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alien and Eastern is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Alien Metals and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum and Alien 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 Alien Metals are associated (or correlated) with Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Alien Metals i.e., Alien Metals and Eastern Platinum go up and down completely randomly.
Pair Corralation between Alien Metals and Eastern Platinum
Assuming the 90 days horizon Alien Metals is expected to generate 25.47 times more return on investment than Eastern Platinum. However, Alien Metals is 25.47 times more volatile than Eastern Platinum Limited. It trades about 0.17 of its potential returns per unit of risk. Eastern Platinum Limited is currently generating about 0.0 per unit of risk. If you would invest 0.05 in Alien Metals on November 3, 2024 and sell it today you would earn a total of 0.04 from holding Alien Metals or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.64% |
| Values | Daily Returns |
Alien Metals vs. Eastern Platinum Limited
Performance |
| Timeline |
| Alien Metals |
| Eastern Platinum |
Alien Metals and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alien Metals and Eastern Platinum
The main advantage of trading using opposite Alien Metals and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alien Metals position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.| Alien Metals vs. Cartier Iron Corp | Alien Metals vs. Arctic Star Exploration | Alien Metals vs. Denarius Silver Corp | Alien Metals vs. Pacific Ridge Exploration |
| Eastern Platinum vs. Thunder Mountain Gold | Eastern Platinum vs. Chesapeake Gold Corp | Eastern Platinum vs. AbraSilver Resource Corp | Eastern Platinum vs. GoGold Resources |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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