Correlation Between Metro Bank and Amaroq Minerals
Can any of the company-specific risk be diversified away by investing in both Metro Bank and Amaroq Minerals 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 Metro Bank and Amaroq Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Bank PLC and Amaroq Minerals, you can compare the effects of market volatilities on Metro Bank and Amaroq Minerals 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 Metro Bank with a short position of Amaroq Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Bank and Amaroq Minerals.
Diversification Opportunities for Metro Bank and Amaroq Minerals
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metro and Amaroq is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Metro Bank PLC and Amaroq Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amaroq Minerals and Metro Bank 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 Metro Bank PLC are associated (or correlated) with Amaroq Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amaroq Minerals has no effect on the direction of Metro Bank i.e., Metro Bank and Amaroq Minerals go up and down completely randomly.
Pair Corralation between Metro Bank and Amaroq Minerals
Assuming the 90 days trading horizon Metro Bank PLC is expected to under-perform the Amaroq Minerals. In addition to that, Metro Bank is 1.04 times more volatile than Amaroq Minerals. It trades about -0.03 of its total potential returns per unit of risk. Amaroq Minerals is currently generating about 0.28 per unit of volatility. If you would invest 8,700 in Amaroq Minerals on October 11, 2024 and sell it today you would earn a total of 1,515 from holding Amaroq Minerals or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Metro Bank PLC vs. Amaroq Minerals
Performance |
| Timeline |
| Metro Bank PLC |
| Amaroq Minerals |
Metro Bank and Amaroq Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Bank and Amaroq Minerals
The main advantage of trading using opposite Metro Bank and Amaroq Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Bank position performs unexpectedly, Amaroq Minerals 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 Amaroq Minerals will offset losses from the drop in Amaroq Minerals' long position.| Metro Bank vs. JD Sports Fashion | Metro Bank vs. Molson Coors Beverage | Metro Bank vs. Verizon Communications | Metro Bank vs. Universal Display Corp |
| Amaroq Minerals vs. Live Nation Entertainment | Amaroq Minerals vs. Westlake Chemical Corp | Amaroq Minerals vs. Metro Bank PLC | Amaroq Minerals vs. G5 Entertainment AB |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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