Correlation Between Flagship Investments and Eagle Mountain
Can any of the company-specific risk be diversified away by investing in both Flagship Investments and Eagle Mountain 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 Flagship Investments and Eagle Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and Eagle Mountain Mining, you can compare the effects of market volatilities on Flagship Investments and Eagle Mountain 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 Flagship Investments with a short position of Eagle Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and Eagle Mountain.
Diversification Opportunities for Flagship Investments and Eagle Mountain
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flagship and Eagle is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and Eagle Mountain Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mountain Mining and Flagship Investments 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 Flagship Investments are associated (or correlated) with Eagle Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mountain Mining has no effect on the direction of Flagship Investments i.e., Flagship Investments and Eagle Mountain go up and down completely randomly.
Pair Corralation between Flagship Investments and Eagle Mountain
Assuming the 90 days trading horizon Flagship Investments is expected to generate 0.23 times more return on investment than Eagle Mountain. However, Flagship Investments is 4.29 times less risky than Eagle Mountain. It trades about 0.09 of its potential returns per unit of risk. Eagle Mountain Mining is currently generating about -0.11 per unit of risk. If you would invest 182.00 in Flagship Investments on August 30, 2024 and sell it today you would earn a total of 33.00 from holding Flagship Investments or generate 18.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flagship Investments vs. Eagle Mountain Mining
Performance |
| Timeline |
| Flagship Investments |
| Eagle Mountain Mining |
Flagship Investments and Eagle Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and Eagle Mountain
The main advantage of trading using opposite Flagship Investments and Eagle Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments position performs unexpectedly, Eagle Mountain 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 Eagle Mountain will offset losses from the drop in Eagle Mountain's long position.| Flagship Investments vs. Carnegie Clean Energy | Flagship Investments vs. Platinum Asia Investments | Flagship Investments vs. A1 Investments Resources | Flagship Investments vs. Alto Metals |
| Eagle Mountain vs. Northern Star Resources | Eagle Mountain vs. Evolution Mining | Eagle Mountain vs. Bluescope Steel | Eagle Mountain vs. Sandfire Resources NL |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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