Correlation Between Champion Iron and ETFS Physical
Can any of the company-specific risk be diversified away by investing in both Champion Iron and ETFS Physical 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 Champion Iron and ETFS Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Iron and ETFS Physical Silver, you can compare the effects of market volatilities on Champion Iron and ETFS Physical 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 Champion Iron with a short position of ETFS Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Iron and ETFS Physical.
Diversification Opportunities for Champion Iron and ETFS Physical
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Champion and ETFS is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Champion Iron and ETFS Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS Physical Silver and Champion Iron 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 Champion Iron are associated (or correlated) with ETFS Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS Physical Silver has no effect on the direction of Champion Iron i.e., Champion Iron and ETFS Physical go up and down completely randomly.
Pair Corralation between Champion Iron and ETFS Physical
Assuming the 90 days trading horizon Champion Iron is expected to generate 1.66 times more return on investment than ETFS Physical. However, Champion Iron is 1.66 times more volatile than ETFS Physical Silver. It trades about 0.0 of its potential returns per unit of risk. ETFS Physical Silver is currently generating about -0.3 per unit of risk. If you would invest 576.00 in Champion Iron on September 1, 2024 and sell it today you would lose (3.00) from holding Champion Iron or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Iron vs. ETFS Physical Silver
Performance |
| Timeline |
| Champion Iron |
| ETFS Physical Silver |
Champion Iron and ETFS Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Iron and ETFS Physical
The main advantage of trading using opposite Champion Iron and ETFS Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Iron position performs unexpectedly, ETFS Physical 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 ETFS Physical will offset losses from the drop in ETFS Physical's long position.| Champion Iron vs. Dicker Data | Champion Iron vs. Data3 | Champion Iron vs. Retail Food Group | Champion Iron vs. Charter Hall Retail |
| ETFS Physical vs. Champion Iron | ETFS Physical vs. Australian Dairy Farms | ETFS Physical vs. Perpetual Credit Income | ETFS Physical vs. Greentech Metals |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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