Correlation Between Cornish Metals and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and AfriTin Mining 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 AfriTin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and AfriTin Mining, you can compare the effects of market volatilities on Cornish Metals and AfriTin Mining 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 AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and AfriTin Mining.
Diversification Opportunities for Cornish Metals and AfriTin Mining
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cornish and AfriTin is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining 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 AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Cornish Metals i.e., Cornish Metals and AfriTin Mining go up and down completely randomly.
Pair Corralation between Cornish Metals and AfriTin Mining
Assuming the 90 days trading horizon Cornish Metals is expected to generate 1.18 times more return on investment than AfriTin Mining. However, Cornish Metals is 1.18 times more volatile than AfriTin Mining. It trades about -0.01 of its potential returns per unit of risk. AfriTin Mining is currently generating about -0.04 per unit of risk. If you would invest 1,350 in Cornish Metals on August 31, 2024 and sell it today you would lose (480.00) from holding Cornish Metals or give up 35.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornish Metals vs. AfriTin Mining
Performance |
| Timeline |
| Cornish Metals |
| AfriTin Mining |
Cornish Metals and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and AfriTin Mining
The main advantage of trading using opposite Cornish Metals and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| Cornish Metals vs. Centamin PLC | Cornish Metals vs. Central Asia Metals | Cornish Metals vs. Anglo Asian Mining | Cornish Metals vs. Metals Exploration Plc |
| AfriTin Mining vs. Jacquet Metal Service | AfriTin Mining vs. Bisichi Mining PLC | AfriTin Mining vs. Anglesey Mining | AfriTin Mining vs. Flow Traders NV |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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