Correlation Between Ferrexpo PLC and AfriTin Mining
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and AfriTin Mining 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 AfriTin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and AfriTin Mining, you can compare the effects of market volatilities on Ferrexpo PLC and AfriTin Mining 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 AfriTin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and AfriTin Mining.
Diversification Opportunities for Ferrexpo PLC and AfriTin Mining
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ferrexpo and AfriTin is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and AfriTin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfriTin Mining 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 AfriTin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfriTin Mining has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and AfriTin Mining go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and AfriTin Mining
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 2.17 times more return on investment than AfriTin Mining. However, Ferrexpo PLC is 2.17 times more volatile than AfriTin Mining. It trades about 0.2 of its potential returns per unit of risk. AfriTin Mining is currently generating about -0.25 per unit of risk. If you would invest 4,825 in Ferrexpo PLC on August 31, 2024 and sell it today you would earn a total of 3,385 from holding Ferrexpo PLC or generate 70.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Ferrexpo PLC vs. AfriTin Mining
Performance |
| Timeline |
| Ferrexpo PLC |
| AfriTin Mining |
Ferrexpo PLC and AfriTin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and AfriTin Mining
The main advantage of trading using opposite Ferrexpo PLC and AfriTin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, AfriTin Mining 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 AfriTin Mining will offset losses from the drop in AfriTin Mining's long position.| Ferrexpo PLC vs. Centamin PLC | Ferrexpo PLC vs. Anglo Asian Mining | Ferrexpo PLC vs. Metals Exploration Plc |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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