Correlation Between Fresnillo PLC and Arctic Star
Can any of the company-specific risk be diversified away by investing in both Fresnillo PLC and Arctic Star 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 Arctic Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresnillo PLC and Arctic Star Exploration, you can compare the effects of market volatilities on Fresnillo PLC and Arctic Star 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 Arctic Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresnillo PLC and Arctic Star.
Diversification Opportunities for Fresnillo PLC and Arctic Star
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fresnillo and Arctic is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Fresnillo PLC and Arctic Star Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Star Exploration 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 Arctic Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Star Exploration has no effect on the direction of Fresnillo PLC i.e., Fresnillo PLC and Arctic Star go up and down completely randomly.
Pair Corralation between Fresnillo PLC and Arctic Star
Assuming the 90 days horizon Fresnillo PLC is expected to generate 0.65 times more return on investment than Arctic Star. However, Fresnillo PLC is 1.54 times less risky than Arctic Star. It trades about 0.0 of its potential returns per unit of risk. Arctic Star Exploration is currently generating about -0.02 per unit of risk. If you would invest 825.00 in Fresnillo PLC on August 29, 2024 and sell it today you would lose (12.00) from holding Fresnillo PLC or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Fresnillo PLC vs. Arctic Star Exploration
Performance |
| Timeline |
| Fresnillo PLC |
| Arctic Star Exploration |
Fresnillo PLC and Arctic Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresnillo PLC and Arctic Star
The main advantage of trading using opposite Fresnillo PLC and Arctic Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresnillo PLC position performs unexpectedly, Arctic Star 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 Arctic Star will offset losses from the drop in Arctic Star's long position.| Fresnillo PLC vs. Impala Platinum Holdings | Fresnillo PLC vs. Anglo American Platinum | Fresnillo PLC vs. Platinum Group Metals | Fresnillo PLC vs. AbraSilver Resource Corp |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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