Correlation Between Metals Exploration and Flow Traders
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and Flow Traders 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 Flow Traders 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 Flow Traders NV, you can compare the effects of market volatilities on Metals Exploration and Flow Traders 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 Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Flow Traders.
Diversification Opportunities for Metals Exploration and Flow Traders
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metals and Flow is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV 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 Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of Metals Exploration i.e., Metals Exploration and Flow Traders go up and down completely randomly.
Pair Corralation between Metals Exploration and Flow Traders
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 2.11 times more return on investment than Flow Traders. However, Metals Exploration is 2.11 times more volatile than Flow Traders NV. It trades about 0.1 of its potential returns per unit of risk. Flow Traders NV is currently generating about 0.01 per unit of risk. If you would invest 123.00 in Metals Exploration Plc on August 30, 2024 and sell it today you would earn a total of 462.00 from holding Metals Exploration Plc or generate 375.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Exploration Plc vs. Flow Traders NV
Performance |
| Timeline |
| Metals Exploration Plc |
| Flow Traders NV |
Metals Exploration and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Flow Traders
The main advantage of trading using opposite Metals Exploration and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| Metals Exploration vs. Cornish Metals | Metals Exploration vs. Advanced Medical Solutions | Metals Exploration vs. LPKF Laser Electronics | Metals Exploration vs. Southern Copper Corp |
| Flow Traders vs. Lendinvest PLC | Flow Traders vs. Neometals | Flow Traders vs. Albion Technology General | Flow Traders vs. Jupiter Fund Management |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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