Correlation Between Cornish Metals and Anglo Eastern
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Anglo Eastern 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 Anglo Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Anglo Eastern Plantations PLC, you can compare the effects of market volatilities on Cornish Metals and Anglo Eastern 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 Anglo Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Anglo Eastern.
Diversification Opportunities for Cornish Metals and Anglo Eastern
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cornish and Anglo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Anglo Eastern Plantations PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Eastern Planta 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 Anglo Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Eastern Planta has no effect on the direction of Cornish Metals i.e., Cornish Metals and Anglo Eastern go up and down completely randomly.
Pair Corralation between Cornish Metals and Anglo Eastern
Assuming the 90 days trading horizon Cornish Metals is expected to generate 1.83 times more return on investment than Anglo Eastern. However, Cornish Metals is 1.83 times more volatile than Anglo Eastern Plantations PLC. It trades about 0.08 of its potential returns per unit of risk. Anglo Eastern Plantations PLC is currently generating about -0.09 per unit of risk. If you would invest 790.00 in Cornish Metals on September 12, 2024 and sell it today you would earn a total of 45.00 from holding Cornish Metals or generate 5.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cornish Metals vs. Anglo Eastern Plantations PLC
Performance |
Timeline |
Cornish Metals |
Anglo Eastern Planta |
Cornish Metals and Anglo Eastern Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cornish Metals and Anglo Eastern
The main advantage of trading using opposite Cornish Metals and Anglo Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Anglo Eastern 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 Anglo Eastern will offset losses from the drop in Anglo Eastern's long position.Cornish Metals vs. Givaudan SA | Cornish Metals vs. Antofagasta PLC | Cornish Metals vs. Ferrexpo PLC | Cornish Metals vs. Atalaya Mining |
Anglo Eastern vs. McEwen Mining | Anglo Eastern vs. Vitec Software Group | Anglo Eastern vs. Litigation Capital Management | Anglo Eastern vs. Axway Software 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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