Correlation Between Cornish Metals and SupplyMe Capital
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and SupplyMe Capital 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 SupplyMe Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and SupplyMe Capital PLC, you can compare the effects of market volatilities on Cornish Metals and SupplyMe Capital 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 SupplyMe Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and SupplyMe Capital.
Diversification Opportunities for Cornish Metals and SupplyMe Capital
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cornish and SupplyMe is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and SupplyMe Capital PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SupplyMe Capital PLC 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 SupplyMe Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SupplyMe Capital PLC has no effect on the direction of Cornish Metals i.e., Cornish Metals and SupplyMe Capital go up and down completely randomly.
Pair Corralation between Cornish Metals and SupplyMe Capital
Assuming the 90 days trading horizon Cornish Metals is expected to generate 0.32 times more return on investment than SupplyMe Capital. However, Cornish Metals is 3.16 times less risky than SupplyMe Capital. It trades about 0.11 of its potential returns per unit of risk. SupplyMe Capital PLC is currently generating about -0.08 per unit of risk. If you would invest 690.00 in Cornish Metals on September 2, 2024 and sell it today you would earn a total of 160.00 from holding Cornish Metals or generate 23.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cornish Metals vs. SupplyMe Capital PLC
Performance |
| Timeline |
| Cornish Metals |
| SupplyMe Capital PLC |
Cornish Metals and SupplyMe Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and SupplyMe Capital
The main advantage of trading using opposite Cornish Metals and SupplyMe Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, SupplyMe Capital 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 SupplyMe Capital will offset losses from the drop in SupplyMe Capital's long position.| Cornish Metals vs. Givaudan SA | Cornish Metals vs. Antofagasta PLC | Cornish Metals vs. Centamin PLC | Cornish Metals vs. Atalaya Mining |
| SupplyMe Capital vs. Lloyds Banking Group | SupplyMe Capital vs. Premier African Minerals | SupplyMe Capital vs. SANTANDER UK 8 | SupplyMe Capital vs. 88 Energy |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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