Correlation Between NEXA RESOURCES and FIREWEED METALS
Can any of the company-specific risk be diversified away by investing in both NEXA RESOURCES and FIREWEED METALS 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 NEXA RESOURCES and FIREWEED METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXA RESOURCES SA and FIREWEED METALS P, you can compare the effects of market volatilities on NEXA RESOURCES and FIREWEED METALS 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 NEXA RESOURCES with a short position of FIREWEED METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXA RESOURCES and FIREWEED METALS.
Diversification Opportunities for NEXA RESOURCES and FIREWEED METALS
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NEXA and FIREWEED is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding NEXA RESOURCES SA and FIREWEED METALS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIREWEED METALS P and NEXA RESOURCES 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 NEXA RESOURCES SA are associated (or correlated) with FIREWEED METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIREWEED METALS P has no effect on the direction of NEXA RESOURCES i.e., NEXA RESOURCES and FIREWEED METALS go up and down completely randomly.
Pair Corralation between NEXA RESOURCES and FIREWEED METALS
Assuming the 90 days horizon NEXA RESOURCES SA is expected to under-perform the FIREWEED METALS. In addition to that, NEXA RESOURCES is 2.28 times more volatile than FIREWEED METALS P. It trades about -0.11 of its total potential returns per unit of risk. FIREWEED METALS P is currently generating about -0.04 per unit of volatility. If you would invest 101.00 in FIREWEED METALS P on November 5, 2024 and sell it today you would lose (2.00) from holding FIREWEED METALS P or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXA RESOURCES SA vs. FIREWEED METALS P
Performance |
| Timeline |
| NEXA RESOURCES SA |
| FIREWEED METALS P |
NEXA RESOURCES and FIREWEED METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXA RESOURCES and FIREWEED METALS
The main advantage of trading using opposite NEXA RESOURCES and FIREWEED METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXA RESOURCES position performs unexpectedly, FIREWEED METALS 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 FIREWEED METALS will offset losses from the drop in FIREWEED METALS's long position.| NEXA RESOURCES vs. Delta Air Lines | NEXA RESOURCES vs. AIR LIQUIDE ADR | NEXA RESOURCES vs. Pentair plc | NEXA RESOURCES vs. DELTA AIR LINES |
| FIREWEED METALS vs. Rio Tinto Group | FIREWEED METALS vs. Anglo American plc | FIREWEED METALS vs. Mineral Resources Limited | FIREWEED METALS vs. Liontown Resources Limited |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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