Correlation Between Manhattan and Gemfields Group
Can any of the company-specific risk be diversified away by investing in both Manhattan and Gemfields Group 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 Manhattan and Gemfields Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manhattan Limited and Gemfields Group Limited, you can compare the effects of market volatilities on Manhattan and Gemfields Group 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 Manhattan with a short position of Gemfields Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manhattan and Gemfields Group.
Diversification Opportunities for Manhattan and Gemfields Group
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Manhattan and Gemfields is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Limited and Gemfields Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemfields Group and Manhattan 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 Manhattan Limited are associated (or correlated) with Gemfields Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemfields Group has no effect on the direction of Manhattan i.e., Manhattan and Gemfields Group go up and down completely randomly.
Pair Corralation between Manhattan and Gemfields Group
Assuming the 90 days horizon Manhattan Limited is expected to generate 3.98 times more return on investment than Gemfields Group. However, Manhattan is 3.98 times more volatile than Gemfields Group Limited. It trades about 0.15 of its potential returns per unit of risk. Gemfields Group Limited is currently generating about -0.03 per unit of risk. If you would invest 0.19 in Manhattan Limited on November 2, 2024 and sell it today you would earn a total of 0.58 from holding Manhattan Limited or generate 305.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 62.62% |
| Values | Daily Returns |
Manhattan Limited vs. Gemfields Group Limited
Performance |
| Timeline |
| Manhattan Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Gemfields Group |
Manhattan and Gemfields Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manhattan and Gemfields Group
The main advantage of trading using opposite Manhattan and Gemfields Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manhattan position performs unexpectedly, Gemfields Group 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 Gemfields Group will offset losses from the drop in Gemfields Group's long position.| Manhattan vs. EnviroGold Global Limited | Manhattan vs. Gemfields Group Limited | Manhattan vs. Pacific Ridge Exploration | Manhattan vs. Star Royalties |
| Gemfields Group vs. Star Royalties | Gemfields Group vs. Defiance Silver Corp | Gemfields Group vs. Diamond Fields Resources | Gemfields Group vs. GoGold Resources |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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