Correlation Between Glen Eagle and Metals Creek
Can any of the company-specific risk be diversified away by investing in both Glen Eagle and Metals Creek 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 Glen Eagle and Metals Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Glen Eagle Resources and Metals Creek Resources, you can compare the effects of market volatilities on Glen Eagle and Metals Creek 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 Glen Eagle with a short position of Metals Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glen Eagle and Metals Creek.
Diversification Opportunities for Glen Eagle and Metals Creek
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Glen and Metals is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Glen Eagle Resources and Metals Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Creek Resources and Glen Eagle 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 Glen Eagle Resources are associated (or correlated) with Metals Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Creek Resources has no effect on the direction of Glen Eagle i.e., Glen Eagle and Metals Creek go up and down completely randomly.
Pair Corralation between Glen Eagle and Metals Creek
If you would invest 3.00 in Metals Creek Resources on August 29, 2024 and sell it today you would lose (1.00) from holding Metals Creek Resources or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Glen Eagle Resources vs. Metals Creek Resources
Performance |
| Timeline |
| Glen Eagle Resources |
| Metals Creek Resources |
Glen Eagle and Metals Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Glen Eagle and Metals Creek
The main advantage of trading using opposite Glen Eagle and Metals Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glen Eagle position performs unexpectedly, Metals Creek 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 Metals Creek will offset losses from the drop in Metals Creek's long position.The idea behind Glen Eagle Resources and Metals Creek Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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