Correlation Between North American and Pace Metals
Can any of the company-specific risk be diversified away by investing in both North American and Pace 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 North American and Pace Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Financial and Pace Metals, you can compare the effects of market volatilities on North American and Pace 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 North American with a short position of Pace Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Pace Metals.
Diversification Opportunities for North American and Pace Metals
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between North and Pace is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding North American Financial and Pace Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Metals and North American 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 North American Financial are associated (or correlated) with Pace Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Metals has no effect on the direction of North American i.e., North American and Pace Metals go up and down completely randomly.
Pair Corralation between North American and Pace Metals
If you would invest 740.00 in North American Financial on October 26, 2024 and sell it today you would earn a total of 5.00 from holding North American Financial or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Financial vs. Pace Metals
Performance |
| Timeline |
| North American Financial |
| Pace Metals |
North American and Pace Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Pace Metals
The main advantage of trading using opposite North American and Pace Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Pace 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 Pace Metals will offset losses from the drop in Pace Metals' long position.| North American vs. Dividend Growth Split | North American vs. Dividend 15 Split | North American vs. Financial 15 Split | North American vs. Dividend 15 Split |
| Pace Metals vs. Manulife Financial Corp | Pace Metals vs. Endeavour Silver Corp | Pace Metals vs. Canso Credit Trust | Pace Metals vs. Nicola 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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