Correlation Between Huntsman Exploration and Avarone Metals
Can any of the company-specific risk be diversified away by investing in both Huntsman Exploration and Avarone 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 Huntsman Exploration and Avarone Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntsman Exploration and Avarone Metals, you can compare the effects of market volatilities on Huntsman Exploration and Avarone 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 Huntsman Exploration with a short position of Avarone Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntsman Exploration and Avarone Metals.
Diversification Opportunities for Huntsman Exploration and Avarone Metals
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Huntsman and Avarone is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman Exploration and Avarone Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avarone Metals and Huntsman Exploration 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 Huntsman Exploration are associated (or correlated) with Avarone Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avarone Metals has no effect on the direction of Huntsman Exploration i.e., Huntsman Exploration and Avarone Metals go up and down completely randomly.
Pair Corralation between Huntsman Exploration and Avarone Metals
Assuming the 90 days horizon Huntsman Exploration is expected to generate 1.59 times more return on investment than Avarone Metals. However, Huntsman Exploration is 1.59 times more volatile than Avarone Metals. It trades about 0.01 of its potential returns per unit of risk. Avarone Metals is currently generating about -0.13 per unit of risk. If you would invest 9.20 in Huntsman Exploration on November 1, 2024 and sell it today you would lose (4.30) from holding Huntsman Exploration or give up 46.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Huntsman Exploration vs. Avarone Metals
Performance |
| Timeline |
| Huntsman Exploration |
| Avarone Metals |
Huntsman Exploration and Avarone Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntsman Exploration and Avarone Metals
The main advantage of trading using opposite Huntsman Exploration and Avarone Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman Exploration position performs unexpectedly, Avarone 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 Avarone Metals will offset losses from the drop in Avarone Metals' long position.| Huntsman Exploration vs. Aurelia Metals Limited | Huntsman Exploration vs. Adriatic Metals PLC | Huntsman Exploration vs. American Helium | Huntsman Exploration vs. Progressive Planet Solutions |
| Avarone Metals vs. Aurelia Metals Limited | Avarone Metals vs. Adriatic Metals PLC | Avarone Metals vs. Progressive Planet Solutions | Avarone Metals vs. Almonty Industries |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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