Correlation Between Metals Exploration and Ferrexpo PLC
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and Ferrexpo PLC 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 Ferrexpo PLC 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 Ferrexpo PLC, you can compare the effects of market volatilities on Metals Exploration and Ferrexpo PLC 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 Ferrexpo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Ferrexpo PLC.
Diversification Opportunities for Metals Exploration and Ferrexpo PLC
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metals and Ferrexpo is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Ferrexpo PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferrexpo PLC 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 Ferrexpo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferrexpo PLC has no effect on the direction of Metals Exploration i.e., Metals Exploration and Ferrexpo PLC go up and down completely randomly.
Pair Corralation between Metals Exploration and Ferrexpo PLC
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 0.77 times more return on investment than Ferrexpo PLC. However, Metals Exploration Plc is 1.29 times less risky than Ferrexpo PLC. It trades about 0.16 of its potential returns per unit of risk. Ferrexpo PLC is currently generating about 0.11 per unit of risk. If you would invest 540.00 in Metals Exploration Plc on October 20, 2024 and sell it today you would earn a total of 55.00 from holding Metals Exploration Plc or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Exploration Plc vs. Ferrexpo PLC
Performance |
| Timeline |
| Metals Exploration Plc |
| Ferrexpo PLC |
Metals Exploration and Ferrexpo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Ferrexpo PLC
The main advantage of trading using opposite Metals Exploration and Ferrexpo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, Ferrexpo PLC 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 Ferrexpo PLC will offset losses from the drop in Ferrexpo PLC's long position.| Metals Exploration vs. Seraphim Space Investment | Metals Exploration vs. Panther Metals PLC | Metals Exploration vs. Livermore Investments Group | Metals Exploration vs. Blackrock World Mining |
| Ferrexpo PLC vs. First Class Metals | Ferrexpo PLC vs. Eastinco Mining Exploration | Ferrexpo PLC vs. Golden Metal Resources | Ferrexpo PLC vs. Metals Exploration 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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