Correlation Between International Biotechnology and Panther Metals
Can any of the company-specific risk be diversified away by investing in both International Biotechnology and Panther 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 International Biotechnology and Panther Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Biotechnology Trust and Panther Metals PLC, you can compare the effects of market volatilities on International Biotechnology and Panther 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 International Biotechnology with a short position of Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Biotechnology and Panther Metals.
Diversification Opportunities for International Biotechnology and Panther Metals
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between International and Panther is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding International Biotechnology Tr and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC and International Biotechnology 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 Biotechnology Trust are associated (or correlated) with Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of International Biotechnology i.e., International Biotechnology and Panther Metals go up and down completely randomly.
Pair Corralation between International Biotechnology and Panther Metals
Assuming the 90 days trading horizon International Biotechnology is expected to generate 26.45 times less return on investment than Panther Metals. But when comparing it to its historical volatility, International Biotechnology Trust is 3.53 times less risky than Panther Metals. It trades about 0.03 of its potential returns per unit of risk. Panther Metals PLC is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 9,500 in Panther Metals PLC on August 28, 2024 and sell it today you would earn a total of 2,750 from holding Panther Metals PLC or generate 28.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
International Biotechnology Tr vs. Panther Metals PLC
Performance |
| Timeline |
| International Biotechnology |
| Panther Metals PLC |
International Biotechnology and Panther Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Biotechnology and Panther Metals
The main advantage of trading using opposite International Biotechnology and Panther Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Biotechnology position performs unexpectedly, Panther 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 Panther Metals will offset losses from the drop in Panther Metals' long position.The idea behind International Biotechnology Trust and Panther Metals PLC 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.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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