Correlation Between Finlay Minerals and CMC Metals
Can any of the company-specific risk be diversified away by investing in both Finlay Minerals and CMC 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 Finlay Minerals and CMC Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finlay Minerals and CMC Metals, you can compare the effects of market volatilities on Finlay Minerals and CMC 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 Finlay Minerals with a short position of CMC Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finlay Minerals and CMC Metals.
Diversification Opportunities for Finlay Minerals and CMC Metals
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Finlay and CMC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Finlay Minerals and CMC Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CMC Metals and Finlay Minerals 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 Finlay Minerals are associated (or correlated) with CMC Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CMC Metals has no effect on the direction of Finlay Minerals i.e., Finlay Minerals and CMC Metals go up and down completely randomly.
Pair Corralation between Finlay Minerals and CMC Metals
If you would invest 3.00 in CMC Metals on August 29, 2024 and sell it today you would lose (1.00) from holding CMC Metals or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finlay Minerals vs. CMC Metals
Performance |
| Timeline |
| Finlay Minerals |
| CMC Metals |
Finlay Minerals and CMC Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finlay Minerals and CMC Metals
The main advantage of trading using opposite Finlay Minerals and CMC Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finlay Minerals position performs unexpectedly, CMC 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 CMC Metals will offset losses from the drop in CMC Metals' long position.| Finlay Minerals vs. CMC Metals | Finlay Minerals vs. Tarku Resources | Finlay Minerals vs. Highway 50 Gold |
| CMC Metals vs. First Majestic Silver | CMC Metals vs. Ivanhoe Energy | CMC Metals vs. Orezone Gold Corp | CMC Metals vs. Faraday Copper Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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