Correlation Between European Metals and ImmuPharma PLC
Can any of the company-specific risk be diversified away by investing in both European Metals and ImmuPharma PLC 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 ImmuPharma PLC 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 ImmuPharma PLC, you can compare the effects of market volatilities on European Metals and ImmuPharma PLC 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 ImmuPharma PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and ImmuPharma PLC.
Diversification Opportunities for European Metals and ImmuPharma PLC
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between European and ImmuPharma is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and ImmuPharma PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ImmuPharma 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 ImmuPharma PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ImmuPharma PLC has no effect on the direction of European Metals i.e., European Metals and ImmuPharma PLC go up and down completely randomly.
Pair Corralation between European Metals and ImmuPharma PLC
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the ImmuPharma PLC. But the stock apears to be less risky and, when comparing its historical volatility, European Metals Holdings is 1.48 times less risky than ImmuPharma PLC. The stock trades about -0.37 of its potential returns per unit of risk. The ImmuPharma PLC is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest 179.00 in ImmuPharma PLC on August 28, 2024 and sell it today you would lose (29.00) from holding ImmuPharma PLC or give up 16.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Metals Holdings vs. ImmuPharma PLC
Performance |
| Timeline |
| European Metals Holdings |
| ImmuPharma PLC |
European Metals and ImmuPharma PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and ImmuPharma PLC
The main advantage of trading using opposite European Metals and ImmuPharma PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, ImmuPharma PLC 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 ImmuPharma PLC will offset losses from the drop in ImmuPharma PLC's long position.| European Metals vs. Givaudan SA | European Metals vs. Antofagasta PLC | European Metals vs. Centamin PLC | European Metals vs. Atalaya Mining |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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