Correlation Between Metro Mining and Austchina Holdings
Can any of the company-specific risk be diversified away by investing in both Metro Mining and Austchina Holdings 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 Austchina Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Mining and Austchina Holdings, you can compare the effects of market volatilities on Metro Mining and Austchina Holdings 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 Austchina Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Mining and Austchina Holdings.
Diversification Opportunities for Metro Mining and Austchina Holdings
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metro and Austchina is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Metro Mining and Austchina Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austchina Holdings 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 Austchina Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austchina Holdings has no effect on the direction of Metro Mining i.e., Metro Mining and Austchina Holdings go up and down completely randomly.
Pair Corralation between Metro Mining and Austchina Holdings
Assuming the 90 days trading horizon Metro Mining is expected to generate 0.18 times more return on investment than Austchina Holdings. However, Metro Mining is 5.63 times less risky than Austchina Holdings. It trades about 0.26 of its potential returns per unit of risk. Austchina Holdings is currently generating about 0.04 per unit of risk. If you would invest 3.50 in Metro Mining on September 12, 2024 and sell it today you would earn a total of 2.70 from holding Metro Mining or generate 77.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Mining vs. Austchina Holdings
Performance |
| Timeline |
| Metro Mining |
| Austchina Holdings |
Metro Mining and Austchina Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Mining and Austchina Holdings
The main advantage of trading using opposite Metro Mining and Austchina Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Mining position performs unexpectedly, Austchina Holdings 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 Austchina Holdings will offset losses from the drop in Austchina Holdings' long position.| Metro Mining vs. Regis Healthcare | Metro Mining vs. Skycity Entertainment Group | Metro Mining vs. AiMedia Technologies | Metro Mining vs. Healthco Healthcare and |
| Austchina Holdings vs. Sky Metals | Austchina Holdings vs. Viva Leisure | Austchina Holdings vs. Dalaroo Metals | Austchina Holdings vs. Australian Unity Office |
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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