Correlation Between Ferrexpo PLC and First
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and First 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 First into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and First Class Metals, you can compare the effects of market volatilities on Ferrexpo PLC and First 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 First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and First.
Diversification Opportunities for Ferrexpo PLC and First
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ferrexpo and First is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and First Class Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Class 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 First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Class Metals has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and First go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and First
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 1.14 times more return on investment than First. However, Ferrexpo PLC is 1.14 times more volatile than First Class Metals. It trades about -0.21 of its potential returns per unit of risk. First Class Metals is currently generating about -0.27 per unit of risk. If you would invest 11,340 in Ferrexpo PLC on October 10, 2024 and sell it today you would lose (2,060) from holding Ferrexpo PLC or give up 18.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferrexpo PLC vs. First Class Metals
Performance |
| Timeline |
| Ferrexpo PLC |
| First Class Metals |
Ferrexpo PLC and First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and First
The main advantage of trading using opposite Ferrexpo PLC and First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, First 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 First will offset losses from the drop in First's long position.| Ferrexpo PLC vs. Hochschild Mining plc | Ferrexpo PLC vs. Trainline Plc | Ferrexpo PLC vs. Air Products Chemicals | Ferrexpo PLC vs. Blackrock World 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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