Correlation Between European Metals and Coor Service
Can any of the company-specific risk be diversified away by investing in both European Metals and Coor Service 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 European Metals and Coor Service into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Metals Holdings and Coor Service Management, you can compare the effects of market volatilities on European Metals and Coor Service 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 European Metals with a short position of Coor Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Coor Service.
Diversification Opportunities for European Metals and Coor Service
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between European and Coor is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Coor Service Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coor Service Management and European 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 European Metals Holdings are associated (or correlated) with Coor Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coor Service Management has no effect on the direction of European Metals i.e., European Metals and Coor Service go up and down completely randomly.
Pair Corralation between European Metals and Coor Service
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Coor Service. In addition to that, European Metals is 1.37 times more volatile than Coor Service Management. It trades about -0.37 of its total potential returns per unit of risk. Coor Service Management is currently generating about -0.3 per unit of volatility. If you would invest 3,716 in Coor Service Management on August 27, 2024 and sell it today you would lose (383.00) from holding Coor Service Management or give up 10.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Metals Holdings vs. Coor Service Management
Performance |
| Timeline |
| European Metals Holdings |
| Coor Service Management |
European Metals and Coor Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Coor Service
The main advantage of trading using opposite European Metals and Coor Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Coor Service 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 Coor Service will offset losses from the drop in Coor Service's long position.| European Metals vs. Givaudan SA | European Metals vs. Antofagasta PLC | European Metals vs. Centamin PLC | European Metals vs. Atalaya Mining |
| Coor Service vs. Samsung Electronics Co | Coor Service vs. Samsung Electronics Co | Coor Service vs. Hyundai Motor | Coor Service vs. Toyota Motor Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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