Correlation Between FC Investment and Metals Exploration
Can any of the company-specific risk be diversified away by investing in both FC Investment and Metals Exploration 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 FC Investment and Metals Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Metals Exploration Plc, you can compare the effects of market volatilities on FC Investment and Metals Exploration 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 FC Investment with a short position of Metals Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Metals Exploration.
Diversification Opportunities for FC Investment and Metals Exploration
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FCIT and Metals is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Metals Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Exploration Plc and FC Investment 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 FC Investment Trust are associated (or correlated) with Metals Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Exploration Plc has no effect on the direction of FC Investment i.e., FC Investment and Metals Exploration go up and down completely randomly.
Pair Corralation between FC Investment and Metals Exploration
Assuming the 90 days trading horizon FC Investment is expected to generate 8.64 times less return on investment than Metals Exploration. But when comparing it to its historical volatility, FC Investment Trust is 4.53 times less risky than Metals Exploration. It trades about 0.05 of its potential returns per unit of risk. Metals Exploration Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 153.00 in Metals Exploration Plc on October 13, 2024 and sell it today you would earn a total of 447.00 from holding Metals Exploration Plc or generate 292.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
FC Investment Trust vs. Metals Exploration Plc
Performance |
| Timeline |
| FC Investment Trust |
| Metals Exploration Plc |
FC Investment and Metals Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Metals Exploration
The main advantage of trading using opposite FC Investment and Metals Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment position performs unexpectedly, Metals Exploration 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 Metals Exploration will offset losses from the drop in Metals Exploration's long position.| FC Investment vs. Ion Beam Applications | FC Investment vs. Lundin Mining Corp | FC Investment vs. Various Eateries PLC | FC Investment vs. GlobalData PLC |
| Metals Exploration vs. Broadcom | Metals Exploration vs. Trainline Plc | Metals Exploration vs. Spirent Communications plc | Metals Exploration vs. American Homes 4 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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