Correlation Between Metals Exploration and River
Can any of the company-specific risk be diversified away by investing in both Metals Exploration and River 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 River 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 River and Mercantile, you can compare the effects of market volatilities on Metals Exploration and River 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 River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and River.
Diversification Opportunities for Metals Exploration and River
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metals and River is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and River and Mercantile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River and Mercantile 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 River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River and Mercantile has no effect on the direction of Metals Exploration i.e., Metals Exploration and River go up and down completely randomly.
Pair Corralation between Metals Exploration and River
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 4.96 times more return on investment than River. However, Metals Exploration is 4.96 times more volatile than River and Mercantile. It trades about 0.1 of its potential returns per unit of risk. River and Mercantile is currently generating about -0.01 per unit of risk. If you would invest 400.00 in Metals Exploration Plc on August 28, 2024 and sell it today you would earn a total of 185.00 from holding Metals Exploration Plc or generate 46.25% 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. River and Mercantile
Performance |
| Timeline |
| Metals Exploration Plc |
| River and Mercantile |
Metals Exploration and River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and River
The main advantage of trading using opposite Metals Exploration and River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration position performs unexpectedly, River 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 River will offset losses from the drop in River's long position.| Metals Exploration vs. Givaudan SA | Metals Exploration vs. Antofagasta PLC | Metals Exploration vs. Centamin PLC | Metals Exploration vs. Atalaya Mining |
| River vs. Southern Copper Corp | River vs. Sparebank 1 SR | River vs. Metals Exploration Plc | River vs. Alior Bank SA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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