Correlation Between Metro Mining and Finexia Financial
Can any of the company-specific risk be diversified away by investing in both Metro Mining and Finexia Financial 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 Finexia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Mining and Finexia Financial Group, you can compare the effects of market volatilities on Metro Mining and Finexia Financial 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 Finexia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Mining and Finexia Financial.
Diversification Opportunities for Metro Mining and Finexia Financial
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metro and Finexia is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Metro Mining and Finexia Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finexia Financial 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 Finexia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finexia Financial has no effect on the direction of Metro Mining i.e., Metro Mining and Finexia Financial go up and down completely randomly.
Pair Corralation between Metro Mining and Finexia Financial
Assuming the 90 days trading horizon Metro Mining is expected to generate 4.06 times less return on investment than Finexia Financial. But when comparing it to its historical volatility, Metro Mining is 1.08 times less risky than Finexia Financial. It trades about 0.07 of its potential returns per unit of risk. Finexia Financial Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Finexia Financial Group on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Finexia Financial Group or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Mining vs. Finexia Financial Group
Performance |
| Timeline |
| Metro Mining |
| Finexia Financial |
Metro Mining and Finexia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Mining and Finexia Financial
The main advantage of trading using opposite Metro Mining and Finexia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Mining position performs unexpectedly, Finexia Financial 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 Finexia Financial will offset losses from the drop in Finexia Financial's long position.| Metro Mining vs. Northern Star Resources | Metro Mining vs. Evolution Mining | Metro Mining vs. Bluescope Steel | Metro Mining vs. Sandfire Resources NL |
| Finexia Financial vs. oOhMedia | Finexia Financial vs. Charter Hall Retail | Finexia Financial vs. Dexus Convenience Retail | Finexia Financial vs. Nine Entertainment Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |