Correlation Between Financial and American Manganese
Can any of the company-specific risk be diversified away by investing in both Financial and American Manganese 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 Financial and American Manganese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and American Manganese, you can compare the effects of market volatilities on Financial and American Manganese 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 Financial with a short position of American Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and American Manganese.
Diversification Opportunities for Financial and American Manganese
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Financial and American is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and American Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Manganese and 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 Financial 15 Split are associated (or correlated) with American Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Manganese has no effect on the direction of Financial i.e., Financial and American Manganese go up and down completely randomly.
Pair Corralation between Financial and American Manganese
Assuming the 90 days trading horizon Financial is expected to generate 18.32 times less return on investment than American Manganese. But when comparing it to its historical volatility, Financial 15 Split is 21.71 times less risky than American Manganese. It trades about 0.33 of its potential returns per unit of risk. American Manganese is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 9.00 in American Manganese on August 31, 2024 and sell it today you would earn a total of 5.00 from holding American Manganese or generate 55.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial 15 Split vs. American Manganese
Performance |
| Timeline |
| Financial 15 Split |
| American Manganese |
Financial and American Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and American Manganese
The main advantage of trading using opposite Financial and American Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial position performs unexpectedly, American Manganese 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 American Manganese will offset losses from the drop in American Manganese's long position.| Financial vs. iShares Canadian HYBrid | Financial vs. Brompton European Dividend | Financial vs. Solar Alliance Energy | Financial vs. PHN Multi Style All Cap |
| American Manganese vs. Solar Alliance Energy | American Manganese vs. Global X Active | American Manganese vs. Financial 15 Split | American Manganese vs. Rubicon Organics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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