Correlation Between AfriTin Mining and Empire Metals
Can any of the company-specific risk be diversified away by investing in both AfriTin Mining and Empire Metals 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 AfriTin Mining and Empire Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AfriTin Mining and Empire Metals Limited, you can compare the effects of market volatilities on AfriTin Mining and Empire Metals 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 AfriTin Mining with a short position of Empire Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfriTin Mining and Empire Metals.
Diversification Opportunities for AfriTin Mining and Empire Metals
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AfriTin and Empire is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AfriTin Mining and Empire Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire Metals Limited and AfriTin Mining 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 AfriTin Mining are associated (or correlated) with Empire Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire Metals Limited has no effect on the direction of AfriTin Mining i.e., AfriTin Mining and Empire Metals go up and down completely randomly.
Pair Corralation between AfriTin Mining and Empire Metals
Assuming the 90 days trading horizon AfriTin Mining is expected to under-perform the Empire Metals. But the stock apears to be less risky and, when comparing its historical volatility, AfriTin Mining is 1.72 times less risky than Empire Metals. The stock trades about -0.03 of its potential returns per unit of risk. The Empire Metals Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 180.00 in Empire Metals Limited on September 24, 2024 and sell it today you would earn a total of 480.00 from holding Empire Metals Limited or generate 266.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AfriTin Mining vs. Empire Metals Limited
Performance |
| Timeline |
| AfriTin Mining |
| Empire Metals Limited |
AfriTin Mining and Empire Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AfriTin Mining and Empire Metals
The main advantage of trading using opposite AfriTin Mining and Empire Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfriTin Mining position performs unexpectedly, Empire Metals 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 Empire Metals will offset losses from the drop in Empire Metals' long position.| AfriTin Mining vs. United Internet AG | AfriTin Mining vs. BW Offshore | AfriTin Mining vs. Batm Advanced Communications | AfriTin Mining vs. Air Products Chemicals |
| Empire Metals vs. Givaudan SA | Empire Metals vs. Antofagasta PLC | Empire Metals vs. Ferrexpo PLC | Empire Metals vs. Atalaya Mining |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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