Correlation Between INDCOMMBK CHINA and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both INDCOMMBK CHINA and Eskay Mining 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 INDCOMMBK CHINA and Eskay Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDCOMMBK CHINA ADR20 and Eskay Mining Corp, you can compare the effects of market volatilities on INDCOMMBK CHINA and Eskay Mining 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 INDCOMMBK CHINA with a short position of Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDCOMMBK CHINA and Eskay Mining.
Diversification Opportunities for INDCOMMBK CHINA and Eskay Mining
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INDCOMMBK and Eskay is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding INDCOMMBK CHINA ADR20 and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp and INDCOMMBK CHINA 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 INDCOMMBK CHINA ADR20 are associated (or correlated) with Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of INDCOMMBK CHINA i.e., INDCOMMBK CHINA and Eskay Mining go up and down completely randomly.
Pair Corralation between INDCOMMBK CHINA and Eskay Mining
Assuming the 90 days trading horizon INDCOMMBK CHINA ADR20 is expected to generate 0.35 times more return on investment than Eskay Mining. However, INDCOMMBK CHINA ADR20 is 2.83 times less risky than Eskay Mining. It trades about 0.06 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about -0.03 per unit of risk. If you would invest 765.00 in INDCOMMBK CHINA ADR20 on September 19, 2024 and sell it today you would earn a total of 395.00 from holding INDCOMMBK CHINA ADR20 or generate 51.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDCOMMBK CHINA ADR20 vs. Eskay Mining Corp
Performance |
| Timeline |
| INDCOMMBK CHINA ADR20 |
| Eskay Mining Corp |
INDCOMMBK CHINA and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDCOMMBK CHINA and Eskay Mining
The main advantage of trading using opposite INDCOMMBK CHINA and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDCOMMBK CHINA position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| INDCOMMBK CHINA vs. Gaztransport Technigaz SA | INDCOMMBK CHINA vs. Commonwealth Bank of | INDCOMMBK CHINA vs. Ameriprise Financial | INDCOMMBK CHINA vs. GOLD ROAD RES |
| Eskay Mining vs. American Lithium Corp | Eskay Mining vs. ADRIATIC METALS LS 013355 | Eskay Mining vs. Superior Plus Corp | Eskay Mining vs. SIVERS SEMICONDUCTORS AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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