Correlation Between Flinders Resources and T2 Metals
Can any of the company-specific risk be diversified away by investing in both Flinders Resources and T2 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 Flinders Resources and T2 Metals 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 T2 Metals Corp, you can compare the effects of market volatilities on Flinders Resources and T2 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 Flinders Resources with a short position of T2 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and T2 Metals.
Diversification Opportunities for Flinders Resources and T2 Metals
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flinders and TWO is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and T2 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T2 Metals Corp 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 T2 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T2 Metals Corp has no effect on the direction of Flinders Resources i.e., Flinders Resources and T2 Metals go up and down completely randomly.
Pair Corralation between Flinders Resources and T2 Metals
Assuming the 90 days horizon Flinders Resources Limited is expected to generate 0.51 times more return on investment than T2 Metals. However, Flinders Resources Limited is 1.95 times less risky than T2 Metals. It trades about 0.17 of its potential returns per unit of risk. T2 Metals Corp is currently generating about -0.02 per unit of risk. If you would invest 495.00 in Flinders Resources Limited on November 30, 2024 and sell it today you would earn a total of 68.00 from holding Flinders Resources Limited or generate 13.74% 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. T2 Metals Corp
Performance |
Timeline |
Flinders Resources |
T2 Metals Corp |
Flinders Resources and T2 Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Flinders Resources and T2 Metals
The main advantage of trading using opposite Flinders Resources and T2 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flinders Resources position performs unexpectedly, T2 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 T2 Metals will offset losses from the drop in T2 Metals' long position.Flinders Resources vs. Pace Metals | ||
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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