Correlation Between Metals Exploration and Gfinity PLC
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and Gfinity 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 Gfinity 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 Gfinity PLC, you can compare the effects of market volatilities on Metals Exploration and Gfinity 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 Gfinity PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Gfinity PLC.
Diversification Opportunities for Metals Exploration and Gfinity PLC
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metals and Gfinity is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Gfinity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gfinity 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 Gfinity PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gfinity PLC has no effect on the direction of Metals Exploration i.e., Metals Exploration and Gfinity PLC go up and down completely randomly.
Pair Corralation between Metals Exploration and Gfinity PLC
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 0.44 times more return on investment than Gfinity PLC. However, Metals Exploration Plc is 2.26 times less risky than Gfinity PLC. It trades about 0.09 of its potential returns per unit of risk. Gfinity PLC is currently generating about -0.01 per unit of risk. If you would invest 135.00 in Metals Exploration Plc on September 25, 2024 and sell it today you would earn a total of 400.00 from holding Metals Exploration Plc or generate 296.3% 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. Gfinity PLC
Performance |
| Timeline |
| Metals Exploration Plc |
| Gfinity PLC |
Metals Exploration and Gfinity PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Gfinity PLC
The main advantage of trading using opposite Metals Exploration and Gfinity PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, Gfinity 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 Gfinity PLC will offset losses from the drop in Gfinity PLC's long position.| Metals Exploration vs. Beowulf Mining | Metals Exploration vs. FC Investment Trust | Metals Exploration vs. Herald Investment Trust | Metals Exploration vs. Jacquet Metal Service |
| Gfinity PLC vs. Cornish Metals | Gfinity PLC vs. Metals Exploration Plc | Gfinity PLC vs. Empire Metals Limited | Gfinity PLC vs. AMG Advanced Metallurgical |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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