Correlation Between Metals Exploration and Gerresheimer
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and Gerresheimer 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 Exploration and Gerresheimer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Exploration Plc and Gerresheimer AG, you can compare the effects of market volatilities on Metals Exploration and Gerresheimer 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 Exploration with a short position of Gerresheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Gerresheimer.
Diversification Opportunities for Metals Exploration and Gerresheimer
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metals and Gerresheimer is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Gerresheimer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gerresheimer AG and Metals Exploration 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 Exploration Plc are associated (or correlated) with Gerresheimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gerresheimer AG has no effect on the direction of Metals Exploration i.e., Metals Exploration and Gerresheimer go up and down completely randomly.
Pair Corralation between Metals Exploration and Gerresheimer
Assuming the 90 days trading horizon Metals Exploration Plc is expected to under-perform the Gerresheimer. In addition to that, Metals Exploration is 1.58 times more volatile than Gerresheimer AG. It trades about -0.19 of its total potential returns per unit of risk. Gerresheimer AG is currently generating about -0.14 per unit of volatility. If you would invest 7,855 in Gerresheimer AG on September 2, 2024 and sell it today you would lose (395.00) from holding Gerresheimer AG or give up 5.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Exploration Plc vs. Gerresheimer AG
Performance |
| Timeline |
| Metals Exploration Plc |
| Gerresheimer AG |
Metals Exploration and Gerresheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Gerresheimer
The main advantage of trading using opposite Metals Exploration and Gerresheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, Gerresheimer 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 Gerresheimer will offset losses from the drop in Gerresheimer's long position.| Metals Exploration vs. Bankers Investment Trust | Metals Exploration vs. New Residential Investment | Metals Exploration vs. Oakley Capital Investments | Metals Exploration vs. Sydbank |
| Gerresheimer vs. GreenX Metals | Gerresheimer vs. Metals Exploration Plc | Gerresheimer vs. Endeavour Mining Corp | Gerresheimer vs. Optima Health plc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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