Correlation Between European Metals and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both European Metals and AfriTin 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 European Metals and AfriTin Mining 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 AfriTin Mining, you can compare the effects of market volatilities on European Metals and AfriTin 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 European Metals with a short position of AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and AfriTin Mining.
Diversification Opportunities for European Metals and AfriTin Mining
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between European and AfriTin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining 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 AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of European Metals i.e., European Metals and AfriTin Mining go up and down completely randomly.
Pair Corralation between European Metals and AfriTin Mining
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the AfriTin Mining. But the stock apears to be less risky and, when comparing its historical volatility, European Metals Holdings is 1.95 times less risky than AfriTin Mining. The stock trades about -0.23 of its potential returns per unit of risk. The AfriTin Mining is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 220.00 in AfriTin Mining on September 20, 2024 and sell it today you would earn a total of 25.00 from holding AfriTin Mining or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Metals Holdings vs. AfriTin Mining
Performance |
| Timeline |
| European Metals Holdings |
| AfriTin Mining |
European Metals and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and AfriTin Mining
The main advantage of trading using opposite European Metals and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, AfriTin 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| European Metals vs. Waste Management | European Metals vs. Naturhouse Health SA | European Metals vs. Cardinal Health | European Metals vs. Planet Fitness Cl |
| AfriTin Mining vs. Givaudan SA | AfriTin Mining vs. Antofagasta PLC | AfriTin Mining vs. Ferrexpo PLC | AfriTin Mining vs. Atalaya Mining |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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