Correlation Between Metals Exploration and International Business
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and International Business 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 International Business 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 International Business Machines, you can compare the effects of market volatilities on Metals Exploration and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and International Business.
Diversification Opportunities for Metals Exploration and International Business
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Metals and International is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Metals Exploration i.e., Metals Exploration and International Business go up and down completely randomly.
Pair Corralation between Metals Exploration and International Business
If you would invest 565.00 in Metals Exploration Plc on August 24, 2024 and sell it today you would earn a total of 5.00 from holding Metals Exploration Plc or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
Metals Exploration Plc vs. International Business Machine
Performance |
| Timeline |
| Metals Exploration Plc |
| International Business |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Metals Exploration and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and International Business
The main advantage of trading using opposite Metals Exploration and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Metals Exploration vs. Central Asia Metals | Metals Exploration vs. Coor Service Management | Metals Exploration vs. Sancus Lending Group | Metals Exploration vs. Aeorema Communications Plc |
| International Business vs. Liontrust Asset Management | International Business vs. Air Products Chemicals | International Business vs. Futura Medical | International Business vs. Playtech 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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