Correlation Between Balkan Mining and Stelar Metals
Can any of the company-specific risk be diversified away by investing in both Balkan Mining and Stelar 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 Balkan Mining and Stelar Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balkan Mining and and Stelar Metals, you can compare the effects of market volatilities on Balkan Mining and Stelar 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 Balkan Mining with a short position of Stelar Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balkan Mining and Stelar Metals.
Diversification Opportunities for Balkan Mining and Stelar Metals
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Balkan and Stelar is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Balkan Mining and and Stelar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelar Metals and Balkan 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 Balkan Mining and are associated (or correlated) with Stelar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelar Metals has no effect on the direction of Balkan Mining i.e., Balkan Mining and Stelar Metals go up and down completely randomly.
Pair Corralation between Balkan Mining and Stelar Metals
Assuming the 90 days trading horizon Balkan Mining and is expected to generate 0.75 times more return on investment than Stelar Metals. However, Balkan Mining and is 1.33 times less risky than Stelar Metals. It trades about 0.1 of its potential returns per unit of risk. Stelar Metals is currently generating about -0.06 per unit of risk. If you would invest 4.80 in Balkan Mining and on October 29, 2024 and sell it today you would earn a total of 0.20 from holding Balkan Mining and or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balkan Mining and vs. Stelar Metals
Performance |
| Timeline |
| Balkan Mining |
| Stelar Metals |
Balkan Mining and Stelar Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balkan Mining and Stelar Metals
The main advantage of trading using opposite Balkan Mining and Stelar Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balkan Mining position performs unexpectedly, Stelar 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 Stelar Metals will offset losses from the drop in Stelar Metals' long position.| Balkan Mining vs. Flagship Investments | Balkan Mining vs. Gold Road Resources | Balkan Mining vs. Duxton Broadacre Farms | Balkan Mining vs. Carlton Investments |
| Stelar Metals vs. Advanced Braking Technology | Stelar Metals vs. EROAD | Stelar Metals vs. Sports Entertainment Group | Stelar Metals vs. Vulcan Steel |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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