Correlation Between Bankers Investment and Metals Exploration
Can any of the company-specific risk be diversified away by investing in both Bankers Investment and Metals Exploration 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 Bankers Investment and Metals Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and Metals Exploration Plc, you can compare the effects of market volatilities on Bankers Investment and Metals Exploration 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 Bankers Investment with a short position of Metals Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and Metals Exploration.
Diversification Opportunities for Bankers Investment and Metals Exploration
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bankers and Metals is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust and Metals Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Exploration Plc and Bankers Investment 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 Bankers Investment Trust are associated (or correlated) with Metals Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Exploration Plc has no effect on the direction of Bankers Investment i.e., Bankers Investment and Metals Exploration go up and down completely randomly.
Pair Corralation between Bankers Investment and Metals Exploration
Assuming the 90 days trading horizon Bankers Investment Trust is expected to generate 0.28 times more return on investment than Metals Exploration. However, Bankers Investment Trust is 3.63 times less risky than Metals Exploration. It trades about 0.26 of its potential returns per unit of risk. Metals Exploration Plc is currently generating about -0.24 per unit of risk. If you would invest 11,676 in Bankers Investment Trust on November 7, 2024 and sell it today you would earn a total of 704.00 from holding Bankers Investment Trust or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. Metals Exploration Plc
Performance |
| Timeline |
| Bankers Investment Trust |
| Metals Exploration Plc |
Bankers Investment and Metals Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and Metals Exploration
The main advantage of trading using opposite Bankers Investment and Metals Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment position performs unexpectedly, Metals Exploration 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 Metals Exploration will offset losses from the drop in Metals Exploration's long position.| Bankers Investment vs. Gamma Communications PLC | Bankers Investment vs. Zoom Video Communications | Bankers Investment vs. Litigation Capital Management | Bankers Investment vs. Aeorema Communications Plc |
| Metals Exploration vs. Verizon Communications | Metals Exploration vs. Fair Oaks Income | Metals Exploration vs. Telecom Italia SpA | Metals Exploration vs. Zegona Communications Plc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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