Correlation Between Impala Platinum and Bowler Metcalf
Can any of the company-specific risk be diversified away by investing in both Impala Platinum and Bowler Metcalf 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 Impala Platinum and Bowler Metcalf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impala Platinum Holdings and Bowler Metcalf, you can compare the effects of market volatilities on Impala Platinum and Bowler Metcalf 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 Impala Platinum with a short position of Bowler Metcalf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impala Platinum and Bowler Metcalf.
Diversification Opportunities for Impala Platinum and Bowler Metcalf
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Impala and Bowler is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and Bowler Metcalf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowler Metcalf and Impala Platinum 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 Impala Platinum Holdings are associated (or correlated) with Bowler Metcalf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowler Metcalf has no effect on the direction of Impala Platinum i.e., Impala Platinum and Bowler Metcalf go up and down completely randomly.
Pair Corralation between Impala Platinum and Bowler Metcalf
Assuming the 90 days trading horizon Impala Platinum Holdings is expected to under-perform the Bowler Metcalf. In addition to that, Impala Platinum is 2.54 times more volatile than Bowler Metcalf. It trades about -0.27 of its total potential returns per unit of risk. Bowler Metcalf is currently generating about 0.23 per unit of volatility. If you would invest 127,000 in Bowler Metcalf on August 28, 2024 and sell it today you would earn a total of 8,900 from holding Bowler Metcalf or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impala Platinum Holdings vs. Bowler Metcalf
Performance |
| Timeline |
| Impala Platinum Holdings |
| Bowler Metcalf |
Impala Platinum and Bowler Metcalf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impala Platinum and Bowler Metcalf
The main advantage of trading using opposite Impala Platinum and Bowler Metcalf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impala Platinum position performs unexpectedly, Bowler Metcalf 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 Bowler Metcalf will offset losses from the drop in Bowler Metcalf's long position.The idea behind Impala Platinum Holdings and Bowler Metcalf 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.| Bowler Metcalf vs. Datatec | Bowler Metcalf vs. Deneb Investments | Bowler Metcalf vs. City Lodge Hotels | Bowler Metcalf vs. Zeder Investments |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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