Correlation Between Metals Exploration and EJF Investments
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and EJF Investments 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 EJF Investments 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 EJF Investments, you can compare the effects of market volatilities on Metals Exploration and EJF Investments 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 EJF Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and EJF Investments.
Diversification Opportunities for Metals Exploration and EJF Investments
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metals and EJF is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments 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 EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of Metals Exploration i.e., Metals Exploration and EJF Investments go up and down completely randomly.
Pair Corralation between Metals Exploration and EJF Investments
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 2.66 times more return on investment than EJF Investments. However, Metals Exploration is 2.66 times more volatile than EJF Investments. It trades about 0.07 of its potential returns per unit of risk. EJF Investments is currently generating about 0.02 per unit of risk. If you would invest 185.00 in Metals Exploration Plc on November 5, 2024 and sell it today you would earn a total of 335.00 from holding Metals Exploration Plc or generate 181.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Exploration Plc vs. EJF Investments
Performance |
| Timeline |
| Metals Exploration Plc |
| EJF Investments |
Metals Exploration and EJF Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and EJF Investments
The main advantage of trading using opposite Metals Exploration and EJF Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, EJF Investments 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 EJF Investments will offset losses from the drop in EJF Investments' long position.| Metals Exploration vs. Givaudan SA | Metals Exploration vs. Antofagasta PLC | Metals Exploration vs. Ferrexpo PLC | Metals Exploration vs. Atalaya Mining |
| EJF Investments vs. Tata Steel Limited | EJF Investments vs. Seche Environnement SA | EJF Investments vs. Symphony Environmental Technologies | EJF Investments vs. Systemair AB |
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 CEOs Directory module to screen CEOs from public companies around the world.
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