Correlation Between European Metals and Cloudcoco Group

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Can any of the company-specific risk be diversified away by investing in both European Metals and Cloudcoco Group 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 Cloudcoco Group 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 Cloudcoco Group PLC, you can compare the effects of market volatilities on European Metals and Cloudcoco Group 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 Cloudcoco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Cloudcoco Group.

Diversification Opportunities for European Metals and Cloudcoco Group

EuropeanCloudcocoDiversified AwayEuropeanCloudcocoDiversified Away100%
0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between European and Cloudcoco is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Cloudcoco Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloudcoco Group PLC 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 Cloudcoco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloudcoco Group PLC has no effect on the direction of European Metals i.e., European Metals and Cloudcoco Group go up and down completely randomly.

Pair Corralation between European Metals and Cloudcoco Group

Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Cloudcoco Group. But the stock apears to be less risky and, when comparing its historical volatility, European Metals Holdings is 5.53 times less risky than Cloudcoco Group. The stock trades about -0.14 of its potential returns per unit of risk. The Cloudcoco Group PLC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Cloudcoco Group PLC on September 23, 2024 and sell it today you would lose (12.00) from holding Cloudcoco Group PLC or give up 34.29% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

European Metals Holdings  vs.  Cloudcoco Group PLC

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 050100150200
JavaScript chart by amCharts 3.21.15EMH CLCO
       Timeline  
European Metals Holdings 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in European Metals Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, European Metals is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec6.577.588.599.51010.5
Cloudcoco Group PLC 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Cloudcoco Group PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Cloudcoco Group unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.10.20.30.40.5

European Metals and Cloudcoco Group Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.32-3.99-2.65-1.31-0.02191.292.613.935.24 0.0050.0100.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15EMH CLCO
       Returns  

Pair Trading with European Metals and Cloudcoco Group

The main advantage of trading using opposite European Metals and Cloudcoco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Cloudcoco Group 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 Cloudcoco Group will offset losses from the drop in Cloudcoco Group's long position.
The idea behind European Metals Holdings and Cloudcoco Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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