Correlation Between Impax Environmental and Fresnillo PLC
Can any of the company-specific risk be diversified away by investing in both Impax Environmental and Fresnillo 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 Impax Environmental and Fresnillo PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impax Environmental Markets and Fresnillo PLC, you can compare the effects of market volatilities on Impax Environmental and Fresnillo 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 Impax Environmental with a short position of Fresnillo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impax Environmental and Fresnillo PLC.
Diversification Opportunities for Impax Environmental and Fresnillo PLC
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impax and Fresnillo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Impax Environmental Markets and Fresnillo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresnillo PLC and Impax Environmental 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 Impax Environmental Markets are associated (or correlated) with Fresnillo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresnillo PLC has no effect on the direction of Impax Environmental i.e., Impax Environmental and Fresnillo PLC go up and down completely randomly.
Pair Corralation between Impax Environmental and Fresnillo PLC
Assuming the 90 days trading horizon Impax Environmental Markets is expected to under-perform the Fresnillo PLC. But the stock apears to be less risky and, when comparing its historical volatility, Impax Environmental Markets is 2.48 times less risky than Fresnillo PLC. The stock trades about -0.03 of its potential returns per unit of risk. The Fresnillo PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 56,182 in Fresnillo PLC on September 2, 2024 and sell it today you would earn a total of 8,418 from holding Fresnillo PLC or generate 14.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impax Environmental Markets vs. Fresnillo PLC
Performance |
| Timeline |
| Impax Environmental |
| Fresnillo PLC |
Impax Environmental and Fresnillo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impax Environmental and Fresnillo PLC
The main advantage of trading using opposite Impax Environmental and Fresnillo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impax Environmental position performs unexpectedly, Fresnillo 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 Fresnillo PLC will offset losses from the drop in Fresnillo PLC's long position.| Impax Environmental vs. Toyota Motor Corp | Impax Environmental vs. SoftBank Group Corp | Impax Environmental vs. OTP Bank Nyrt | Impax Environmental vs. Las Vegas Sands |
| Fresnillo PLC vs. Givaudan SA | Fresnillo PLC vs. Antofagasta PLC | Fresnillo PLC vs. Centamin PLC | Fresnillo PLC vs. Atalaya Mining |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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