Correlation Between Mount Gibson and Meta Financial
Can any of the company-specific risk be diversified away by investing in both Mount Gibson and Meta Financial 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 Mount Gibson and Meta Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mount Gibson Iron and Meta Financial Group, you can compare the effects of market volatilities on Mount Gibson and Meta Financial 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 Mount Gibson with a short position of Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mount Gibson and Meta Financial.
Diversification Opportunities for Mount Gibson and Meta Financial
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mount and Meta is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mount Gibson Iron and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group and Mount Gibson 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 Mount Gibson Iron are associated (or correlated) with Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of Mount Gibson i.e., Mount Gibson and Meta Financial go up and down completely randomly.
Pair Corralation between Mount Gibson and Meta Financial
Assuming the 90 days horizon Mount Gibson Iron is expected to under-perform the Meta Financial. In addition to that, Mount Gibson is 3.3 times more volatile than Meta Financial Group. It trades about -0.01 of its total potential returns per unit of risk. Meta Financial Group is currently generating about 0.12 per unit of volatility. If you would invest 4,743 in Meta Financial Group on November 7, 2024 and sell it today you would earn a total of 3,007 from holding Meta Financial Group or generate 63.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mount Gibson Iron vs. Meta Financial Group
Performance |
| Timeline |
| Mount Gibson Iron |
| Meta Financial Group |
Mount Gibson and Meta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mount Gibson and Meta Financial
The main advantage of trading using opposite Mount Gibson and Meta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mount Gibson position performs unexpectedly, Meta Financial 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 Meta Financial will offset losses from the drop in Meta Financial's long position.| Mount Gibson vs. PennantPark Investment | Mount Gibson vs. ATRESMEDIA | Mount Gibson vs. Keck Seng Investments | Mount Gibson vs. Fuji Media Holdings |
| Meta Financial vs. Plastic Omnium | Meta Financial vs. GOODYEAR T RUBBER | Meta Financial vs. KOBE STEEL LTD | Meta Financial vs. Vulcan Materials |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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