Correlation Between Bloomsbury Publishing and METALL ZUG
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing and METALL ZUG 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 Bloomsbury Publishing and METALL ZUG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and METALL ZUG AG, you can compare the effects of market volatilities on Bloomsbury Publishing and METALL ZUG 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 Bloomsbury Publishing with a short position of METALL ZUG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and METALL ZUG.
Diversification Opportunities for Bloomsbury Publishing and METALL ZUG
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bloomsbury and METALL is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and METALL ZUG AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METALL ZUG AG and Bloomsbury Publishing 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 Bloomsbury Publishing Plc are associated (or correlated) with METALL ZUG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METALL ZUG AG has no effect on the direction of Bloomsbury Publishing i.e., Bloomsbury Publishing and METALL ZUG go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and METALL ZUG
Assuming the 90 days trading horizon Bloomsbury Publishing Plc is expected to generate 1.11 times more return on investment than METALL ZUG. However, Bloomsbury Publishing is 1.11 times more volatile than METALL ZUG AG. It trades about 0.13 of its potential returns per unit of risk. METALL ZUG AG is currently generating about -0.07 per unit of risk. If you would invest 67,200 in Bloomsbury Publishing Plc on September 14, 2024 and sell it today you would earn a total of 2,600 from holding Bloomsbury Publishing Plc or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. METALL ZUG AG
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| METALL ZUG AG |
Bloomsbury Publishing and METALL ZUG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and METALL ZUG
The main advantage of trading using opposite Bloomsbury Publishing and METALL ZUG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing position performs unexpectedly, METALL ZUG 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 METALL ZUG will offset losses from the drop in METALL ZUG's long position.| Bloomsbury Publishing vs. Cairo Communication SpA | Bloomsbury Publishing vs. Verizon Communications | Bloomsbury Publishing vs. Fonix Mobile plc | Bloomsbury Publishing vs. Flow Traders NV |
| METALL ZUG vs. Schroders Investment Trusts | METALL ZUG vs. Diversified Energy | METALL ZUG vs. Gaztransport et Technigaz | METALL ZUG vs. FC Investment Trust |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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