Correlation Between Euro Manganese and Eagle Plains
Can any of the company-specific risk be diversified away by investing in both Euro Manganese and Eagle Plains 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 Euro Manganese and Eagle Plains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euro Manganese and Eagle Plains Resources, you can compare the effects of market volatilities on Euro Manganese and Eagle Plains 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 Euro Manganese with a short position of Eagle Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euro Manganese and Eagle Plains.
Diversification Opportunities for Euro Manganese and Eagle Plains
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Euro and Eagle is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Euro Manganese and Eagle Plains Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Plains Resources and Euro Manganese 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 Euro Manganese are associated (or correlated) with Eagle Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Plains Resources has no effect on the direction of Euro Manganese i.e., Euro Manganese and Eagle Plains go up and down completely randomly.
Pair Corralation between Euro Manganese and Eagle Plains
Assuming the 90 days horizon Euro Manganese is expected to generate 0.85 times more return on investment than Eagle Plains. However, Euro Manganese is 1.18 times less risky than Eagle Plains. It trades about 0.2 of its potential returns per unit of risk. Eagle Plains Resources is currently generating about 0.16 per unit of risk. If you would invest 2.50 in Euro Manganese on November 5, 2024 and sell it today you would earn a total of 0.95 from holding Euro Manganese or generate 38.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euro Manganese vs. Eagle Plains Resources
Performance |
| Timeline |
| Euro Manganese |
| Eagle Plains Resources |
Euro Manganese and Eagle Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euro Manganese and Eagle Plains
The main advantage of trading using opposite Euro Manganese and Eagle Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euro Manganese position performs unexpectedly, Eagle Plains 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 Eagle Plains will offset losses from the drop in Eagle Plains' long position.| Euro Manganese vs. Bravada Gold | Euro Manganese vs. Silver Spruce Resources | Euro Manganese vs. Monitor Ventures | Euro Manganese vs. Pershing Resources |
| Eagle Plains vs. Norra Metals Corp | Eagle Plains vs. E79 Resources Corp | Eagle Plains vs. Voltage Metals Corp | Eagle Plains vs. Cantex Mine Development |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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