Correlation Between Cornish Metals and FinecoBank SpA
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and FinecoBank SpA 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 Cornish Metals and FinecoBank SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and FinecoBank SpA, you can compare the effects of market volatilities on Cornish Metals and FinecoBank SpA 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 Cornish Metals with a short position of FinecoBank SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and FinecoBank SpA.
Diversification Opportunities for Cornish Metals and FinecoBank SpA
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cornish and FinecoBank is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and FinecoBank SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FinecoBank SpA and Cornish Metals 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 Cornish Metals are associated (or correlated) with FinecoBank SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FinecoBank SpA has no effect on the direction of Cornish Metals i.e., Cornish Metals and FinecoBank SpA go up and down completely randomly.
Pair Corralation between Cornish Metals and FinecoBank SpA
Assuming the 90 days trading horizon Cornish Metals is expected to under-perform the FinecoBank SpA. In addition to that, Cornish Metals is 1.81 times more volatile than FinecoBank SpA. It trades about -0.09 of its total potential returns per unit of risk. FinecoBank SpA is currently generating about 0.29 per unit of volatility. If you would invest 1,679 in FinecoBank SpA on October 30, 2024 and sell it today you would earn a total of 127.00 from holding FinecoBank SpA or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornish Metals vs. FinecoBank SpA
Performance |
| Timeline |
| Cornish Metals |
| FinecoBank SpA |
Cornish Metals and FinecoBank SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and FinecoBank SpA
The main advantage of trading using opposite Cornish Metals and FinecoBank SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, FinecoBank SpA 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 FinecoBank SpA will offset losses from the drop in FinecoBank SpA's long position.| Cornish Metals vs. Manulife Financial Corp | Cornish Metals vs. Charter Communications Cl | Cornish Metals vs. Sparebank 1 SR | Cornish Metals vs. Mobile Tornado Group |
| FinecoBank SpA vs. Spirent Communications plc | FinecoBank SpA vs. Alliance Data Systems | FinecoBank SpA vs. Fidelity National Information | FinecoBank SpA vs. Cellnex Telecom SA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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