Correlation Between ConvaTec Group and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both ConvaTec Group and Minerals Technologies 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 ConvaTec Group and Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConvaTec Group Plc and Minerals Technologies, you can compare the effects of market volatilities on ConvaTec Group and Minerals Technologies 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 ConvaTec Group with a short position of Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConvaTec Group and Minerals Technologies.
Diversification Opportunities for ConvaTec Group and Minerals Technologies
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ConvaTec and Minerals is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding ConvaTec Group Plc and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies and ConvaTec Group 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 ConvaTec Group Plc are associated (or correlated) with Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of ConvaTec Group i.e., ConvaTec Group and Minerals Technologies go up and down completely randomly.
Pair Corralation between ConvaTec Group and Minerals Technologies
Assuming the 90 days horizon ConvaTec Group Plc is expected to generate 0.74 times more return on investment than Minerals Technologies. However, ConvaTec Group Plc is 1.34 times less risky than Minerals Technologies. It trades about 0.29 of its potential returns per unit of risk. Minerals Technologies is currently generating about -0.37 per unit of risk. If you would invest 289.00 in ConvaTec Group Plc on December 4, 2024 and sell it today you would earn a total of 19.00 from holding ConvaTec Group Plc or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
ConvaTec Group Plc vs. Minerals Technologies
Performance |
| Timeline |
| ConvaTec Group Plc |
| Minerals Technologies |
ConvaTec Group and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConvaTec Group and Minerals Technologies
The main advantage of trading using opposite ConvaTec Group and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConvaTec Group position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| ConvaTec Group vs. Ecolab Inc | ConvaTec Group vs. Perseus Mining Limited | ConvaTec Group vs. RTG Mining | ConvaTec Group vs. Hudson Technologies |
| Minerals Technologies vs. Quaker Chemical | Minerals Technologies vs. Innospec | Minerals Technologies vs. H B Fuller | Minerals Technologies vs. Cabot |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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