Correlation Between International Consolidated and Metalnrg PLC
Can any of the company-specific risk be diversified away by investing in both International Consolidated and Metalnrg PLC 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 International Consolidated and Metalnrg PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and Metalnrg PLC, you can compare the effects of market volatilities on International Consolidated and Metalnrg PLC 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 International Consolidated with a short position of Metalnrg PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Metalnrg PLC.
Diversification Opportunities for International Consolidated and Metalnrg PLC
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between International and Metalnrg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and Metalnrg PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalnrg PLC and International Consolidated 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 International Consolidated Airlines are associated (or correlated) with Metalnrg PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalnrg PLC has no effect on the direction of International Consolidated i.e., International Consolidated and Metalnrg PLC go up and down completely randomly.
Pair Corralation between International Consolidated and Metalnrg PLC
Assuming the 90 days trading horizon International Consolidated Airlines is expected to generate 0.06 times more return on investment than Metalnrg PLC. However, International Consolidated Airlines is 15.83 times less risky than Metalnrg PLC. It trades about 0.44 of its potential returns per unit of risk. Metalnrg PLC is currently generating about -0.21 per unit of risk. If you would invest 28,800 in International Consolidated Airlines on October 12, 2024 and sell it today you would earn a total of 2,790 from holding International Consolidated Airlines or generate 9.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. Metalnrg PLC
Performance |
| Timeline |
| International Consolidated |
| Metalnrg PLC |
International Consolidated and Metalnrg PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Metalnrg PLC
The main advantage of trading using opposite International Consolidated and Metalnrg PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated position performs unexpectedly, Metalnrg PLC 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 Metalnrg PLC will offset losses from the drop in Metalnrg PLC's long position.| International Consolidated vs. MediaZest plc | International Consolidated vs. Everyman Media Group | International Consolidated vs. JD Sports Fashion | International Consolidated vs. Beazer Homes USA |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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