Correlation Between Intuitive Investments and European Metals
Can any of the company-specific risk be diversified away by investing in both Intuitive Investments and European 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 Intuitive Investments and European Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Investments Group and European Metals Holdings, you can compare the effects of market volatilities on Intuitive Investments and European 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 Intuitive Investments with a short position of European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and European Metals.
Diversification Opportunities for Intuitive Investments and European Metals
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intuitive and European is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings and Intuitive Investments 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 Intuitive Investments Group are associated (or correlated) with European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and European Metals go up and down completely randomly.
Pair Corralation between Intuitive Investments and European Metals
Assuming the 90 days trading horizon Intuitive Investments Group is expected to generate 0.7 times more return on investment than European Metals. However, Intuitive Investments Group is 1.43 times less risky than European Metals. It trades about 0.04 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.04 per unit of risk. If you would invest 10,000 in Intuitive Investments Group on November 3, 2024 and sell it today you would earn a total of 2,300 from holding Intuitive Investments Group or generate 23.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Investments Group vs. European Metals Holdings
Performance |
| Timeline |
| Intuitive Investments |
| European Metals Holdings |
Intuitive Investments and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Investments and European Metals
The main advantage of trading using opposite Intuitive Investments and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments position performs unexpectedly, European 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 European Metals will offset losses from the drop in European Metals' long position.| Intuitive Investments vs. Target Healthcare REIT | Intuitive Investments vs. Concurrent Technologies Plc | Intuitive Investments vs. Naturhouse Health SA | Intuitive Investments vs. MyHealthChecked Plc |
| European Metals vs. Empire Metals Limited | European Metals vs. Air Products Chemicals | European Metals vs. Virgin Wines UK | European Metals vs. Evolution Gaming Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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