Correlation Between Finexia Financial and Everest Metals
Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Everest 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 Finexia Financial and Everest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finexia Financial Group and Everest Metals, you can compare the effects of market volatilities on Finexia Financial and Everest 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 Finexia Financial with a short position of Everest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Everest Metals.
Diversification Opportunities for Finexia Financial and Everest Metals
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finexia and Everest is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Everest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Metals and Finexia Financial 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 Finexia Financial Group are associated (or correlated) with Everest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Metals has no effect on the direction of Finexia Financial i.e., Finexia Financial and Everest Metals go up and down completely randomly.
Pair Corralation between Finexia Financial and Everest Metals
Assuming the 90 days trading horizon Finexia Financial is expected to generate 1.07 times less return on investment than Everest Metals. But when comparing it to its historical volatility, Finexia Financial Group is 2.46 times less risky than Everest Metals. It trades about 0.33 of its potential returns per unit of risk. Everest Metals is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Everest Metals on November 6, 2024 and sell it today you would earn a total of 1.00 from holding Everest Metals or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Finexia Financial Group vs. Everest Metals
Performance |
| Timeline |
| Finexia Financial |
| Everest Metals |
Finexia Financial and Everest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finexia Financial and Everest Metals
The main advantage of trading using opposite Finexia Financial and Everest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finexia Financial position performs unexpectedly, Everest 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 Everest Metals will offset losses from the drop in Everest Metals' long position.| Finexia Financial vs. Queste Communications | Finexia Financial vs. Readytech Holdings | Finexia Financial vs. High Tech Metals | Finexia Financial vs. Energy Technologies Limited |
| Everest Metals vs. Northern Star Resources | Everest Metals vs. Evolution Mining | Everest Metals vs. Bluescope Steel | Everest Metals vs. De Grey 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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