Correlation Between Metals Creek and Glen Eagle
Can any of the company-specific risk be diversified away by investing in both Metals Creek and Glen Eagle 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 Metals Creek and Glen Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Creek Resources and Glen Eagle Resources, you can compare the effects of market volatilities on Metals Creek and Glen Eagle 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 Metals Creek with a short position of Glen Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Creek and Glen Eagle.
Diversification Opportunities for Metals Creek and Glen Eagle
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Metals and Glen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Metals Creek Resources and Glen Eagle Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glen Eagle Resources and Metals Creek 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 Metals Creek Resources are associated (or correlated) with Glen Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glen Eagle Resources has no effect on the direction of Metals Creek i.e., Metals Creek and Glen Eagle go up and down completely randomly.
Pair Corralation between Metals Creek and Glen Eagle
If you would invest 0.12 in Glen Eagle Resources on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Glen Eagle Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Creek Resources vs. Glen Eagle Resources
Performance |
| Timeline |
| Metals Creek Resources |
| Glen Eagle Resources |
Metals Creek and Glen Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Creek and Glen Eagle
The main advantage of trading using opposite Metals Creek and Glen Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Creek position performs unexpectedly, Glen Eagle 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 Glen Eagle will offset losses from the drop in Glen Eagle's long position.The idea behind Metals Creek Resources and Glen Eagle Resources 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.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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