Correlation Between Flinders Resources and Chemtrade Logistics
Can any of the company-specific risk be diversified away by investing in both Flinders Resources and Chemtrade Logistics 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 Flinders Resources and Chemtrade Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flinders Resources Limited and Chemtrade Logistics Income, you can compare the effects of market volatilities on Flinders Resources and Chemtrade Logistics 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 Flinders Resources with a short position of Chemtrade Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and Chemtrade Logistics.
Diversification Opportunities for Flinders Resources and Chemtrade Logistics
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flinders and Chemtrade is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and Chemtrade Logistics Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemtrade Logistics and Flinders Resources 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 Flinders Resources Limited are associated (or correlated) with Chemtrade Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemtrade Logistics has no effect on the direction of Flinders Resources i.e., Flinders Resources and Chemtrade Logistics go up and down completely randomly.
Pair Corralation between Flinders Resources and Chemtrade Logistics
Assuming the 90 days horizon Flinders Resources Limited is expected to generate 2.64 times more return on investment than Chemtrade Logistics. However, Flinders Resources is 2.64 times more volatile than Chemtrade Logistics Income. It trades about 0.03 of its potential returns per unit of risk. Chemtrade Logistics Income is currently generating about -0.07 per unit of risk. If you would invest 572.00 in Flinders Resources Limited on November 7, 2024 and sell it today you would earn a total of 4.00 from holding Flinders Resources Limited or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flinders Resources Limited vs. Chemtrade Logistics Income
Performance |
| Timeline |
| Flinders Resources |
| Chemtrade Logistics |
Flinders Resources and Chemtrade Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flinders Resources and Chemtrade Logistics
The main advantage of trading using opposite Flinders Resources and Chemtrade Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flinders Resources position performs unexpectedly, Chemtrade Logistics 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 Chemtrade Logistics will offset losses from the drop in Chemtrade Logistics' long position.| Flinders Resources vs. IAMGold | Flinders Resources vs. Eldorado Gold Corp | Flinders Resources vs. Alamos Gold | Flinders Resources vs. NovaGold Resources |
| Chemtrade Logistics vs. Extendicare | Chemtrade Logistics vs. NorthWest Healthcare Properties | Chemtrade Logistics vs. Exchange Income | Chemtrade Logistics vs. Freehold Royalties |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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