Correlation Between Environmental and Balkan Mining
Can any of the company-specific risk be diversified away by investing in both Environmental and Balkan 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 Environmental and Balkan Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Environmental Group and Balkan Mining and, you can compare the effects of market volatilities on Environmental and Balkan 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 Environmental with a short position of Balkan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Environmental and Balkan Mining.
Diversification Opportunities for Environmental and Balkan Mining
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Environmental and Balkan is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding The Environmental Group and Balkan Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balkan Mining and Environmental 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 The Environmental Group are associated (or correlated) with Balkan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balkan Mining has no effect on the direction of Environmental i.e., Environmental and Balkan Mining go up and down completely randomly.
Pair Corralation between Environmental and Balkan Mining
Assuming the 90 days trading horizon The Environmental Group is expected to generate 0.79 times more return on investment than Balkan Mining. However, The Environmental Group is 1.27 times less risky than Balkan Mining. It trades about 0.09 of its potential returns per unit of risk. Balkan Mining and is currently generating about -0.21 per unit of risk. If you would invest 28.00 in The Environmental Group on November 9, 2024 and sell it today you would earn a total of 1.00 from holding The Environmental Group or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Environmental Group vs. Balkan Mining and
Performance |
| Timeline |
| The Environmental |
| Balkan Mining |
Environmental and Balkan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Environmental and Balkan Mining
The main advantage of trading using opposite Environmental and Balkan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Environmental position performs unexpectedly, Balkan 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 Balkan Mining will offset losses from the drop in Balkan Mining's long position.| Environmental vs. Super Retail Group | Environmental vs. Aussie Broadband | Environmental vs. Norfolk Metals | Environmental vs. IDP Education |
| Balkan Mining vs. Bisalloy Steel Group | Balkan Mining vs. Pearl Gull Iron | Balkan Mining vs. Andean Silver Limited | Balkan Mining vs. Iron Road |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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