Correlation Between European Metals and IShares Physical
Can any of the company-specific risk be diversified away by investing in both European Metals and IShares Physical 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 IShares Physical 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 iShares Physical Silver, you can compare the effects of market volatilities on European Metals and IShares Physical 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 IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Metals and IShares Physical.
Diversification Opportunities for European Metals and IShares Physical
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between European and IShares is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding European Metals Holdings and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver 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 IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of European Metals i.e., European Metals and IShares Physical go up and down completely randomly.
Pair Corralation between European Metals and IShares Physical
Assuming the 90 days trading horizon European Metals Holdings is expected to under-perform the IShares Physical. In addition to that, European Metals is 1.19 times more volatile than iShares Physical Silver. It trades about -0.22 of its total potential returns per unit of risk. iShares Physical Silver is currently generating about 0.04 per unit of volatility. If you would invest 2,922 in iShares Physical Silver on September 14, 2024 and sell it today you would earn a total of 35.00 from holding iShares Physical Silver or generate 1.2% 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. iShares Physical Silver
Performance |
| Timeline |
| European Metals Holdings |
| iShares Physical Silver |
European Metals and IShares Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Metals and IShares Physical
The main advantage of trading using opposite European Metals and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Metals position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's long position.| European Metals vs. Made Tech Group | European Metals vs. Ecclesiastical Insurance Office | European Metals vs. Concurrent Technologies Plc | European Metals vs. Roper Technologies |
| IShares Physical vs. Microchip Technology | IShares Physical vs. European Metals Holdings | IShares Physical vs. Cornish Metals | IShares Physical vs. GreenX Metals |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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