Correlation Between Metro Mining and Actinogen Medical
Can any of the company-specific risk be diversified away by investing in both Metro Mining and Actinogen Medical 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 Metro Mining and Actinogen Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Mining and Actinogen Medical, you can compare the effects of market volatilities on Metro Mining and Actinogen Medical 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 Metro Mining with a short position of Actinogen Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Mining and Actinogen Medical.
Diversification Opportunities for Metro Mining and Actinogen Medical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metro and Actinogen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Metro Mining and Actinogen Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actinogen Medical and Metro Mining 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 Metro Mining are associated (or correlated) with Actinogen Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actinogen Medical has no effect on the direction of Metro Mining i.e., Metro Mining and Actinogen Medical go up and down completely randomly.
Pair Corralation between Metro Mining and Actinogen Medical
Assuming the 90 days trading horizon Metro Mining is expected to generate 1.53 times less return on investment than Actinogen Medical. But when comparing it to its historical volatility, Metro Mining is 1.04 times less risky than Actinogen Medical. It trades about 0.11 of its potential returns per unit of risk. Actinogen Medical is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Actinogen Medical on November 5, 2024 and sell it today you would earn a total of 0.20 from holding Actinogen Medical or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Mining vs. Actinogen Medical
Performance |
| Timeline |
| Metro Mining |
| Actinogen Medical |
Metro Mining and Actinogen Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Mining and Actinogen Medical
The main advantage of trading using opposite Metro Mining and Actinogen Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Mining position performs unexpectedly, Actinogen Medical 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 Actinogen Medical will offset losses from the drop in Actinogen Medical's long position.| Metro Mining vs. Northern Star Resources | Metro Mining vs. Evolution Mining | Metro Mining vs. Bluescope Steel | Metro Mining vs. De Grey Mining |
| Actinogen Medical vs. Hotel Property Investments | Actinogen Medical vs. Dynamic Drill And | Actinogen Medical vs. Nufarm | Actinogen Medical vs. Insignia Financial |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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