Correlation Between Future Metals and Panther Metals
Can any of the company-specific risk be diversified away by investing in both Future Metals and Panther 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 Future Metals and Panther Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Future Metals NL and Panther Metals PLC, you can compare the effects of market volatilities on Future Metals and Panther 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 Future Metals with a short position of Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Future Metals and Panther Metals.
Diversification Opportunities for Future Metals and Panther Metals
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Future and Panther is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Future Metals NL and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC and Future Metals 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 Future Metals NL are associated (or correlated) with Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Future Metals i.e., Future Metals and Panther Metals go up and down completely randomly.
Pair Corralation between Future Metals and Panther Metals
Assuming the 90 days trading horizon Future Metals NL is expected to under-perform the Panther Metals. But the stock apears to be less risky and, when comparing its historical volatility, Future Metals NL is 1.85 times less risky than Panther Metals. The stock trades about -0.36 of its potential returns per unit of risk. The Panther Metals PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 10,000 in Panther Metals PLC on August 30, 2024 and sell it today you would earn a total of 1,500 from holding Panther Metals PLC or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Future Metals NL vs. Panther Metals PLC
Performance |
| Timeline |
| Future Metals NL |
| Panther Metals PLC |
Future Metals and Panther Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Future Metals and Panther Metals
The main advantage of trading using opposite Future Metals and Panther Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future Metals position performs unexpectedly, Panther 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 Panther Metals will offset losses from the drop in Panther Metals' long position.| Future Metals vs. Givaudan SA | Future Metals vs. Antofagasta PLC | Future Metals vs. Centamin PLC | Future Metals vs. Atalaya Mining |
| Panther Metals vs. Givaudan SA | Panther Metals vs. Antofagasta PLC | Panther Metals vs. Centamin PLC | Panther Metals vs. Atalaya 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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