Correlation Between Ferrexpo PLC and African Pioneer
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and African Pioneer 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 Ferrexpo PLC and African Pioneer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and African Pioneer PLC, you can compare the effects of market volatilities on Ferrexpo PLC and African Pioneer 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 Ferrexpo PLC with a short position of African Pioneer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and African Pioneer.
Diversification Opportunities for Ferrexpo PLC and African Pioneer
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ferrexpo and African is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and African Pioneer PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Pioneer PLC and Ferrexpo PLC 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 Ferrexpo PLC are associated (or correlated) with African Pioneer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Pioneer PLC has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and African Pioneer go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and African Pioneer
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 4.45 times more return on investment than African Pioneer. However, Ferrexpo PLC is 4.45 times more volatile than African Pioneer PLC. It trades about 0.12 of its potential returns per unit of risk. African Pioneer PLC is currently generating about -0.36 per unit of risk. If you would invest 6,510 in Ferrexpo PLC on August 30, 2024 and sell it today you would earn a total of 1,170 from holding Ferrexpo PLC or generate 17.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ferrexpo PLC vs. African Pioneer PLC
Performance |
| Timeline |
| Ferrexpo PLC |
| African Pioneer PLC |
Ferrexpo PLC and African Pioneer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and African Pioneer
The main advantage of trading using opposite Ferrexpo PLC and African Pioneer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, African Pioneer 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 African Pioneer will offset losses from the drop in African Pioneer's long position.| Ferrexpo PLC vs. Diversified Energy | Ferrexpo PLC vs. Kinnevik Investment AB | Ferrexpo PLC vs. Bankers Investment Trust | Ferrexpo PLC vs. Premier Foods PLC |
| African Pioneer vs. International Biotechnology Trust | African Pioneer vs. Take Two Interactive Software | African Pioneer vs. Allianz Technology Trust | African Pioneer vs. Polar Capital Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |