Correlation Between European Metals and Brunner Investment
Can any of the company-specific risk be diversified away by investing in both European Metals and Brunner Investment 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 Brunner Investment 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 Brunner Investment Trust, you can compare the effects of market volatilities on European Metals and Brunner Investment 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 Brunner Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Brunner Investment.
Diversification Opportunities for European Metals and Brunner Investment
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between European and Brunner is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Brunner Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunner Investment Trust 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 Brunner Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunner Investment Trust has no effect on the direction of European Metals i.e., European Metals and Brunner Investment go up and down completely randomly.
Pair Corralation between European Metals and Brunner Investment
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Brunner Investment. In addition to that, European Metals is 3.63 times more volatile than Brunner Investment Trust. It trades about -0.14 of its total potential returns per unit of risk. Brunner Investment Trust is currently generating about 0.16 per unit of volatility. If you would invest 129,954 in Brunner Investment Trust on September 4, 2024 and sell it today you would earn a total of 17,046 from holding Brunner Investment Trust or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Metals Holdings vs. Brunner Investment Trust
Performance |
| Timeline |
| European Metals Holdings |
| Brunner Investment Trust |
European Metals and Brunner Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Brunner Investment
The main advantage of trading using opposite European Metals and Brunner Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Brunner Investment 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 Brunner Investment will offset losses from the drop in Brunner Investment's long position.| European Metals vs. Antofagasta PLC | European Metals vs. Atalaya Mining | European Metals vs. Ferrexpo PLC | European Metals vs. Amaroq Minerals |
| Brunner Investment vs. LPKF Laser Electronics | Brunner Investment vs. Vienna Insurance Group | Brunner Investment vs. MTI Wireless Edge | Brunner Investment vs. Compal Electronics GDR |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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