Correlation Between Cornish Metals and Aston Martin
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Aston Martin 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 Aston Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Aston Martin Lagonda, you can compare the effects of market volatilities on Cornish Metals and Aston Martin 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 Aston Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Aston Martin.
Diversification Opportunities for Cornish Metals and Aston Martin
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cornish and Aston is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Aston Martin Lagonda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Martin Lagonda 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 Aston Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Martin Lagonda has no effect on the direction of Cornish Metals i.e., Cornish Metals and Aston Martin go up and down completely randomly.
Pair Corralation between Cornish Metals and Aston Martin
Assuming the 90 days trading horizon Cornish Metals is expected to generate 1.33 times more return on investment than Aston Martin. However, Cornish Metals is 1.33 times more volatile than Aston Martin Lagonda. It trades about 0.05 of its potential returns per unit of risk. Aston Martin Lagonda is currently generating about -0.12 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 25.00 from holding Cornish Metals or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornish Metals vs. Aston Martin Lagonda
Performance |
| Timeline |
| Cornish Metals |
| Aston Martin Lagonda |
Cornish Metals and Aston Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Aston Martin
The main advantage of trading using opposite Cornish Metals and Aston Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Aston Martin 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 Aston Martin will offset losses from the drop in Aston Martin's long position.| Cornish Metals vs. Givaudan SA | Cornish Metals vs. Antofagasta PLC | Cornish Metals vs. Ferrexpo PLC | Cornish Metals vs. Atalaya Mining |
| Aston Martin vs. Empire Metals Limited | Aston Martin vs. Darden Restaurants | Aston Martin vs. Medical Properties Trust | Aston Martin vs. Central Asia 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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