Correlation Between Group 6 and PM Capital
Can any of the company-specific risk be diversified away by investing in both Group 6 and PM Capital 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 Group 6 and PM Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 6 Metals and PM Capital Global, you can compare the effects of market volatilities on Group 6 and PM Capital 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 Group 6 with a short position of PM Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and PM Capital.
Diversification Opportunities for Group 6 and PM Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Group and PGF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and PM Capital Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PM Capital Global and Group 6 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 Group 6 Metals are associated (or correlated) with PM Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PM Capital Global has no effect on the direction of Group 6 i.e., Group 6 and PM Capital go up and down completely randomly.
Pair Corralation between Group 6 and PM Capital
Assuming the 90 days trading horizon Group 6 Metals is expected to under-perform the PM Capital. In addition to that, Group 6 is 4.03 times more volatile than PM Capital Global. It trades about -0.05 of its total potential returns per unit of risk. PM Capital Global is currently generating about 0.07 per unit of volatility. If you would invest 164.00 in PM Capital Global on November 27, 2024 and sell it today you would earn a total of 79.00 from holding PM Capital Global or generate 48.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. PM Capital Global
Performance |
| Timeline |
| Group 6 Metals |
| PM Capital Global |
Group 6 and PM Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and PM Capital
The main advantage of trading using opposite Group 6 and PM Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, PM Capital 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 PM Capital will offset losses from the drop in PM Capital's long position.| Group 6 vs. Sports Entertainment Group | Group 6 vs. Saferoads Holdings | Group 6 vs. Lendlease Group | Group 6 vs. ABACUS STORAGE KING |
| PM Capital vs. Truscott Mining Corp | PM Capital vs. Centaurus Metals | PM Capital vs. Janison Education Group | PM Capital vs. Aeon Metals |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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