Correlation Between East Africa and Euro Manganese
Can any of the company-specific risk be diversified away by investing in both East Africa and Euro Manganese 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 East Africa and Euro Manganese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Africa Metals and Euro Manganese, you can compare the effects of market volatilities on East Africa and Euro Manganese 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 East Africa with a short position of Euro Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and Euro Manganese.
Diversification Opportunities for East Africa and Euro Manganese
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between East and Euro is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Euro Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Manganese and East Africa 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 East Africa Metals are associated (or correlated) with Euro Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Manganese has no effect on the direction of East Africa i.e., East Africa and Euro Manganese go up and down completely randomly.
Pair Corralation between East Africa and Euro Manganese
Assuming the 90 days horizon East Africa Metals is expected to generate 7.61 times more return on investment than Euro Manganese. However, East Africa is 7.61 times more volatile than Euro Manganese. It trades about 0.08 of its potential returns per unit of risk. Euro Manganese is currently generating about -0.01 per unit of risk. If you would invest 9.89 in East Africa Metals on November 9, 2024 and sell it today you would earn a total of 1.11 from holding East Africa Metals or generate 11.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
East Africa Metals vs. Euro Manganese
Performance |
| Timeline |
| East Africa Metals |
| Euro Manganese |
East Africa and Euro Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and Euro Manganese
The main advantage of trading using opposite East Africa and Euro Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa position performs unexpectedly, Euro Manganese 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 Euro Manganese will offset losses from the drop in Euro Manganese's long position.| East Africa vs. Pasinex Resources Limited | East Africa vs. Commander Resources | East Africa vs. Forsys Metals Corp | East Africa vs. American CuMo Mining |
| Euro Manganese vs. Bravada Gold | Euro Manganese vs. Silver Spruce Resources | Euro Manganese vs. Monitor Ventures | Euro Manganese vs. Pershing Resources |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |