Correlation Between AfriTin Mining and European Metals
Can any of the company-specific risk be diversified away by investing in both AfriTin Mining and European 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 European 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 European Metals Holdings, you can compare the effects of market volatilities on AfriTin Mining and European 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 European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfriTin Mining and European Metals.
Diversification Opportunities for AfriTin Mining and European Metals
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AfriTin and European is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AfriTin Mining and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings 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 European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of AfriTin Mining i.e., AfriTin Mining and European Metals go up and down completely randomly.
Pair Corralation between AfriTin Mining and European Metals
Assuming the 90 days trading horizon AfriTin Mining is expected to generate 1.95 times more return on investment than European Metals. However, AfriTin Mining is 1.95 times more volatile than European Metals Holdings. It trades about 0.12 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.23 per unit of risk. If you would invest 220.00 in AfriTin Mining on September 20, 2024 and sell it today you would earn a total of 25.00 from holding AfriTin Mining or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AfriTin Mining vs. European Metals Holdings
Performance |
| Timeline |
| AfriTin Mining |
| European Metals Holdings |
AfriTin Mining and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AfriTin Mining and European Metals
The main advantage of trading using opposite AfriTin Mining and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfriTin Mining position performs unexpectedly, European 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 European Metals will offset losses from the drop in European Metals' long position.| AfriTin Mining vs. Givaudan SA | AfriTin Mining vs. Antofagasta PLC | AfriTin Mining vs. Ferrexpo PLC | AfriTin Mining vs. Atalaya Mining |
| European Metals vs. Waste Management | European Metals vs. Naturhouse Health SA | European Metals vs. Cardinal Health | European Metals vs. Planet Fitness Cl |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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