Correlation Between Ferrexpo PLC and Fulcrum Metals
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Fulcrum 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 Fulcrum 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 Fulcrum Metals PLC, you can compare the effects of market volatilities on Ferrexpo PLC and Fulcrum 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 Fulcrum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Fulcrum Metals.
Diversification Opportunities for Ferrexpo PLC and Fulcrum Metals
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ferrexpo and Fulcrum is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals 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 Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Fulcrum Metals go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Fulcrum Metals
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 1.35 times more return on investment than Fulcrum Metals. However, Ferrexpo PLC is 1.35 times more volatile than Fulcrum Metals PLC. It trades about 0.17 of its potential returns per unit of risk. Fulcrum Metals PLC is currently generating about -0.16 per unit of risk. If you would invest 4,825 in Ferrexpo PLC on September 5, 2024 and sell it today you would earn a total of 4,955 from holding Ferrexpo PLC or generate 102.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.84% |
| Values | Daily Returns |
Ferrexpo PLC vs. Fulcrum Metals PLC
Performance |
| Timeline |
| Ferrexpo PLC |
| Fulcrum Metals PLC |
Ferrexpo PLC and Fulcrum Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Fulcrum Metals
The main advantage of trading using opposite Ferrexpo PLC and Fulcrum Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Fulcrum 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 Fulcrum Metals will offset losses from the drop in Fulcrum Metals' long position.| Ferrexpo PLC vs. Herald Investment Trust | Ferrexpo PLC vs. Lords Grp Trading | Ferrexpo PLC vs. Hansa Investment | Ferrexpo PLC vs. New Residential Investment |
| Fulcrum Metals vs. Givaudan SA | Fulcrum Metals vs. Antofagasta PLC | Fulcrum Metals vs. Atalaya Mining | Fulcrum Metals vs. Ferrexpo PLC |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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