Correlation Between Cornish Metals and Apax Global
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Apax Global 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 Apax Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Apax Global Alpha, you can compare the effects of market volatilities on Cornish Metals and Apax Global 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 Apax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Apax Global.
Diversification Opportunities for Cornish Metals and Apax Global
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cornish and Apax is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Apax Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apax Global Alpha 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 Apax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apax Global Alpha has no effect on the direction of Cornish Metals i.e., Cornish Metals and Apax Global go up and down completely randomly.
Pair Corralation between Cornish Metals and Apax Global
Assuming the 90 days trading horizon Cornish Metals is expected to generate 1.57 times more return on investment than Apax Global. However, Cornish Metals is 1.57 times more volatile than Apax Global Alpha. It trades about 0.21 of its potential returns per unit of risk. Apax Global Alpha is currently generating about -0.01 per unit of risk. If you would invest 865.00 in Cornish Metals on October 21, 2024 and sell it today you would earn a total of 60.00 from holding Cornish Metals or generate 6.94% 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. Apax Global Alpha
Performance |
| Timeline |
| Cornish Metals |
| Apax Global Alpha |
Cornish Metals and Apax Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Apax Global
The main advantage of trading using opposite Cornish Metals and Apax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Apax Global 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 Apax Global will offset losses from the drop in Apax Global's long position.| Cornish Metals vs. Worldwide Healthcare Trust | Cornish Metals vs. JPMorgan Japanese Investment | Cornish Metals vs. Lindsell Train Investment | Cornish Metals vs. Spire Healthcare Group |
| Apax Global vs. Tungsten West PLC | Apax Global vs. Argo Group Limited | Apax Global vs. Hardide PLC | Apax Global vs. Versarien PLC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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