Correlation Between Ferrexpo PLC and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Cornish Metals 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 Cornish Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and Cornish Metals, you can compare the effects of market volatilities on Ferrexpo PLC and Cornish Metals 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 Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Cornish Metals.
Diversification Opportunities for Ferrexpo PLC and Cornish Metals
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ferrexpo and Cornish is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals 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 Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Cornish Metals go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Cornish Metals
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 2.19 times more return on investment than Cornish Metals. However, Ferrexpo PLC is 2.19 times more volatile than Cornish Metals. It trades about 0.08 of its potential returns per unit of risk. Cornish Metals is currently generating about 0.09 per unit of risk. If you would invest 10,420 in Ferrexpo PLC on October 23, 2024 and sell it today you would earn a total of 520.00 from holding Ferrexpo PLC or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferrexpo PLC vs. Cornish Metals
Performance |
| Timeline |
| Ferrexpo PLC |
| Cornish Metals |
Ferrexpo PLC and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Cornish Metals
The main advantage of trading using opposite Ferrexpo PLC and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Cornish Metals 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 Cornish Metals will offset losses from the drop in Cornish Metals' long position.| Ferrexpo PLC vs. Medical Properties Trust | Ferrexpo PLC vs. Coeur Mining | Ferrexpo PLC vs. Silver Bullet Data | Ferrexpo PLC vs. CleanTech Lithium plc |
| Cornish Metals vs. Givaudan SA | Cornish Metals vs. Antofagasta PLC | Cornish Metals vs. Ferrexpo PLC | Cornish Metals vs. Atalaya Mining |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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