Correlation Between Ferrexpo PLC and Elementis PLC
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Elementis PLC 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 Elementis PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and Elementis PLC, you can compare the effects of market volatilities on Ferrexpo PLC and Elementis PLC 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 Elementis PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Elementis PLC.
Diversification Opportunities for Ferrexpo PLC and Elementis PLC
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ferrexpo and Elementis is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Elementis PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elementis 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 Elementis PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elementis PLC has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Elementis PLC go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Elementis PLC
Assuming the 90 days trading horizon Ferrexpo PLC is expected to under-perform the Elementis PLC. In addition to that, Ferrexpo PLC is 2.08 times more volatile than Elementis PLC. It trades about -0.02 of its total potential returns per unit of risk. Elementis PLC is currently generating about 0.03 per unit of volatility. If you would invest 11,397 in Elementis PLC on August 30, 2024 and sell it today you would earn a total of 1,823 from holding Elementis PLC or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferrexpo PLC vs. Elementis PLC
Performance |
| Timeline |
| Ferrexpo PLC |
| Elementis PLC |
Ferrexpo PLC and Elementis PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Elementis PLC
The main advantage of trading using opposite Ferrexpo PLC and Elementis PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Elementis PLC 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 Elementis PLC will offset losses from the drop in Elementis PLC'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 |
| Elementis PLC vs. Host Hotels Resorts | Elementis PLC vs. Ebro Foods | Elementis PLC vs. PPHE Hotel Group | Elementis PLC vs. Global Net Lease |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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