Correlation Between Financial and IMetal Resources
Can any of the company-specific risk be diversified away by investing in both Financial and IMetal Resources 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 IMetal Resources 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 iMetal Resources, you can compare the effects of market volatilities on Financial and IMetal Resources 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 IMetal Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and IMetal Resources.
Diversification Opportunities for Financial and IMetal Resources
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Financial and IMetal is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and iMetal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iMetal Resources 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 IMetal Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iMetal Resources has no effect on the direction of Financial i.e., Financial and IMetal Resources go up and down completely randomly.
Pair Corralation between Financial and IMetal Resources
Assuming the 90 days trading horizon Financial 15 Split is expected to generate 0.05 times more return on investment than IMetal Resources. However, Financial 15 Split is 19.92 times less risky than IMetal Resources. It trades about 0.26 of its potential returns per unit of risk. iMetal Resources is currently generating about 0.01 per unit of risk. If you would invest 1,016 in Financial 15 Split on September 2, 2024 and sell it today you would earn a total of 43.00 from holding Financial 15 Split or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Financial 15 Split vs. iMetal Resources
Performance |
| Timeline |
| Financial 15 Split |
| iMetal Resources |
Financial and IMetal Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and IMetal Resources
The main advantage of trading using opposite Financial and IMetal Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial position performs unexpectedly, IMetal Resources 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 IMetal Resources will offset losses from the drop in IMetal Resources' long position.| Financial vs. North American Financial | Financial vs. Dividend 15 Split | Financial vs. Dividend Growth Split | Financial vs. Dividend 15 Split |
| IMetal Resources vs. Verizon Communications CDR | IMetal Resources vs. Datable Technology Corp | IMetal Resources vs. CVW CleanTech | IMetal Resources vs. AGF Management Limited |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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