Correlation Between Materion and Nexa Resources
Can any of the company-specific risk be diversified away by investing in both Materion and Nexa Resources 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 Materion and Nexa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materion and Nexa Resources SA, you can compare the effects of market volatilities on Materion and Nexa Resources 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 Materion with a short position of Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materion and Nexa Resources.
Diversification Opportunities for Materion and Nexa Resources
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Materion and Nexa is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Materion and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA and Materion 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 Materion are associated (or correlated) with Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of Materion i.e., Materion and Nexa Resources go up and down completely randomly.
Pair Corralation between Materion and Nexa Resources
Given the investment horizon of 90 days Materion is expected to generate 21.22 times less return on investment than Nexa Resources. But when comparing it to its historical volatility, Materion is 1.05 times less risky than Nexa Resources. It trades about 0.0 of its potential returns per unit of risk. Nexa Resources SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 587.00 in Nexa Resources SA on November 19, 2024 and sell it today you would lose (33.00) from holding Nexa Resources SA or give up 5.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materion vs. Nexa Resources SA
Performance |
| Timeline |
| Materion |
| Nexa Resources SA |
Materion and Nexa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materion and Nexa Resources
The main advantage of trading using opposite Materion and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materion position performs unexpectedly, Nexa Resources 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 Nexa Resources will offset losses from the drop in Nexa Resources' long position.| Materion vs. Skeena Resources | Materion vs. Compass Minerals International | Materion vs. IperionX Limited American | Materion vs. EMX Royalty Corp |
| Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources vs. EMX Royalty Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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