Correlation Between Oceanic Iron and Fortescue Metals
Can any of the company-specific risk be diversified away by investing in both Oceanic Iron and Fortescue 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 Oceanic Iron and Fortescue Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceanic Iron Ore and Fortescue Metals Group, you can compare the effects of market volatilities on Oceanic Iron and Fortescue 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 Oceanic Iron with a short position of Fortescue Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceanic Iron and Fortescue Metals.
Diversification Opportunities for Oceanic Iron and Fortescue Metals
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oceanic and Fortescue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oceanic Iron Ore and Fortescue Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortescue Metals and Oceanic Iron 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 Oceanic Iron Ore are associated (or correlated) with Fortescue Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortescue Metals has no effect on the direction of Oceanic Iron i.e., Oceanic Iron and Fortescue Metals go up and down completely randomly.
Pair Corralation between Oceanic Iron and Fortescue Metals
Assuming the 90 days horizon Oceanic Iron Ore is expected to generate 1.98 times more return on investment than Fortescue Metals. However, Oceanic Iron is 1.98 times more volatile than Fortescue Metals Group. It trades about 0.04 of its potential returns per unit of risk. Fortescue Metals Group is currently generating about -0.07 per unit of risk. If you would invest 6.00 in Oceanic Iron Ore on September 20, 2024 and sell it today you would earn a total of 1.00 from holding Oceanic Iron Ore or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 82.26% |
| Values | Daily Returns |
Oceanic Iron Ore vs. Fortescue Metals Group
Performance |
| Timeline |
| Oceanic Iron Ore |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fortescue Metals |
Oceanic Iron and Fortescue Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceanic Iron and Fortescue Metals
The main advantage of trading using opposite Oceanic Iron and Fortescue Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceanic Iron position performs unexpectedly, Fortescue 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 Fortescue Metals will offset losses from the drop in Fortescue Metals' long position.| Oceanic Iron vs. Avarone Metals | Oceanic Iron vs. Aurelia Metals Limited | Oceanic Iron vs. Adriatic Metals PLC | Oceanic Iron vs. Huntsman Exploration |
| Fortescue Metals vs. IGO Limited | Fortescue Metals vs. Focus Graphite | Fortescue Metals vs. Anson Resources Limited | Fortescue Metals vs. Avarone Metals |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |