Correlation Between European Metals and Intuitive Investments
Can any of the company-specific risk be diversified away by investing in both European Metals and Intuitive Investments 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 Intuitive Investments 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 Intuitive Investments Group, you can compare the effects of market volatilities on European Metals and Intuitive Investments 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 Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and Intuitive Investments.
Diversification Opportunities for European Metals and Intuitive Investments
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between European and Intuitive is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of European Metals i.e., European Metals and Intuitive Investments go up and down completely randomly.
Pair Corralation between European Metals and Intuitive Investments
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the Intuitive Investments. In addition to that, European Metals is 1.43 times more volatile than Intuitive Investments Group. It trades about -0.04 of its total potential returns per unit of risk. Intuitive Investments Group is currently generating about 0.04 per unit of volatility. If you would invest 10,000 in Intuitive Investments Group on November 3, 2024 and sell it today you would earn a total of 2,300 from holding Intuitive Investments Group or generate 23.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Metals Holdings vs. Intuitive Investments Group
Performance |
| Timeline |
| European Metals Holdings |
| Intuitive Investments |
European Metals and Intuitive Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and Intuitive Investments
The main advantage of trading using opposite European Metals and Intuitive Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, Intuitive Investments 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 Intuitive Investments will offset losses from the drop in Intuitive Investments' long position.| European Metals vs. Empire Metals Limited | European Metals vs. Air Products Chemicals | European Metals vs. Virgin Wines UK | European Metals vs. Evolution Gaming Group |
| Intuitive Investments vs. Target Healthcare REIT | Intuitive Investments vs. Concurrent Technologies Plc | Intuitive Investments vs. Naturhouse Health SA | Intuitive Investments vs. MyHealthChecked Plc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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