Correlation Between Fresnillo Plc and NEW PACIFIC
Can any of the company-specific risk be diversified away by investing in both Fresnillo Plc and NEW PACIFIC 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 Fresnillo Plc and NEW PACIFIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresnillo plc and NEW PACIFIC METALS, you can compare the effects of market volatilities on Fresnillo Plc and NEW PACIFIC 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 Fresnillo Plc with a short position of NEW PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresnillo Plc and NEW PACIFIC.
Diversification Opportunities for Fresnillo Plc and NEW PACIFIC
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fresnillo and NEW is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Fresnillo plc and NEW PACIFIC METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW PACIFIC METALS and Fresnillo Plc 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 Fresnillo plc are associated (or correlated) with NEW PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW PACIFIC METALS has no effect on the direction of Fresnillo Plc i.e., Fresnillo Plc and NEW PACIFIC go up and down completely randomly.
Pair Corralation between Fresnillo Plc and NEW PACIFIC
Assuming the 90 days horizon Fresnillo plc is expected to generate 0.76 times more return on investment than NEW PACIFIC. However, Fresnillo plc is 1.31 times less risky than NEW PACIFIC. It trades about 0.31 of its potential returns per unit of risk. NEW PACIFIC METALS is currently generating about 0.11 per unit of risk. If you would invest 751.00 in Fresnillo plc on September 14, 2024 and sell it today you would earn a total of 119.00 from holding Fresnillo plc or generate 15.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresnillo plc vs. NEW PACIFIC METALS
Performance |
| Timeline |
| Fresnillo plc |
| NEW PACIFIC METALS |
Fresnillo Plc and NEW PACIFIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresnillo Plc and NEW PACIFIC
The main advantage of trading using opposite Fresnillo Plc and NEW PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresnillo Plc position performs unexpectedly, NEW PACIFIC 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 NEW PACIFIC will offset losses from the drop in NEW PACIFIC's long position.| Fresnillo Plc vs. Casio Computer CoLtd | Fresnillo Plc vs. National Beverage Corp | Fresnillo Plc vs. MACOM Technology Solutions | Fresnillo Plc vs. JJ SNACK FOODS |
| NEW PACIFIC vs. Superior Plus Corp | NEW PACIFIC vs. SIVERS SEMICONDUCTORS AB | NEW PACIFIC vs. Norsk Hydro ASA | NEW PACIFIC vs. Reliance Steel Aluminum |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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