Correlation Between EasyJet PLC and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both EasyJet PLC and Cornish Metals 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 EasyJet PLC and Cornish Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EasyJet PLC and Cornish Metals, you can compare the effects of market volatilities on EasyJet PLC and Cornish Metals 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 EasyJet PLC with a short position of Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of EasyJet PLC and Cornish Metals.
Diversification Opportunities for EasyJet PLC and Cornish Metals
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EasyJet and Cornish is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding EasyJet PLC and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals and EasyJet PLC 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 EasyJet PLC are associated (or correlated) with Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of EasyJet PLC i.e., EasyJet PLC and Cornish Metals go up and down completely randomly.
Pair Corralation between EasyJet PLC and Cornish Metals
Assuming the 90 days trading horizon EasyJet PLC is expected to generate 0.56 times more return on investment than Cornish Metals. However, EasyJet PLC is 1.79 times less risky than Cornish Metals. It trades about 0.06 of its potential returns per unit of risk. Cornish Metals is currently generating about -0.02 per unit of risk. If you would invest 32,733 in EasyJet PLC on September 24, 2024 and sell it today you would earn a total of 24,427 from holding EasyJet PLC or generate 74.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EasyJet PLC vs. Cornish Metals
Performance |
| Timeline |
| EasyJet PLC |
| Cornish Metals |
EasyJet PLC and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EasyJet PLC and Cornish Metals
The main advantage of trading using opposite EasyJet PLC and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EasyJet PLC position performs unexpectedly, Cornish Metals 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 Cornish Metals will offset losses from the drop in Cornish Metals' long position.| EasyJet PLC vs. Quadrise Plc | EasyJet PLC vs. ImmuPharma PLC | EasyJet PLC vs. Intuitive Investments Group | EasyJet PLC vs. European Metals Holdings |
| Cornish Metals vs. Givaudan SA | Cornish Metals vs. Antofagasta PLC | Cornish Metals vs. Ferrexpo PLC | Cornish Metals vs. Atalaya Mining |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |