Correlation Between European Metals and Asiamet Resources
Can any of the company-specific risk be diversified away by investing in both European Metals and Asiamet Resources 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 Asiamet Resources 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 Asiamet Resources Limited, you can compare the effects of market volatilities on European Metals and Asiamet Resources 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 Asiamet Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Asiamet Resources.
Diversification Opportunities for European Metals and Asiamet Resources
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between European and Asiamet is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Asiamet Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiamet Resources 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 Asiamet Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiamet Resources has no effect on the direction of European Metals i.e., European Metals and Asiamet Resources go up and down completely randomly.
Pair Corralation between European Metals and Asiamet Resources
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Asiamet Resources. But the stock apears to be less risky and, when comparing its historical volatility, European Metals Holdings is 1.36 times less risky than Asiamet Resources. The stock trades about -0.44 of its potential returns per unit of risk. The Asiamet Resources Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Asiamet Resources Limited on December 4, 2024 and sell it today you would earn a total of 3.00 from holding Asiamet Resources Limited or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Metals Holdings vs. Asiamet Resources Limited
Performance |
| Timeline |
| European Metals Holdings |
| Asiamet Resources |
European Metals and Asiamet Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Asiamet Resources
The main advantage of trading using opposite European Metals and Asiamet Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Asiamet Resources 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 Asiamet Resources will offset losses from the drop in Asiamet Resources' long position.| European Metals vs. Zoom Video Communications | European Metals vs. Spirent Communications plc | European Metals vs. Charter Communications Cl | European Metals vs. CleanTech Lithium plc |
| Asiamet Resources vs. Check Point Software | Asiamet Resources vs. K3 Business Technology | Asiamet Resources vs. Micron Technology | Asiamet Resources vs. Direct Line Insurance |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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