Correlation Between Nexa Resources and Materion
Can any of the company-specific risk be diversified away by investing in both Nexa Resources and Materion 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 Materion 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 Materion, you can compare the effects of market volatilities on Nexa Resources and Materion 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 Materion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexa Resources and Materion.
Diversification Opportunities for Nexa Resources and Materion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nexa and Materion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nexa Resources SA and Materion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materion 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 Materion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materion has no effect on the direction of Nexa Resources i.e., Nexa Resources and Materion go up and down completely randomly.
Pair Corralation between Nexa Resources and Materion
Given the investment horizon of 90 days Nexa Resources SA is expected to under-perform the Materion. But the stock apears to be less risky and, when comparing its historical volatility, Nexa Resources SA is 1.57 times less risky than Materion. The stock trades about -0.11 of its potential returns per unit of risk. The Materion is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 10,421 in Materion on August 25, 2024 and sell it today you would earn a total of 1,255 from holding Materion or generate 12.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nexa Resources SA vs. Materion
Performance |
| Timeline |
| Nexa Resources SA |
| Materion |
Nexa Resources and Materion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexa Resources and Materion
The main advantage of trading using opposite Nexa Resources and Materion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexa Resources position performs unexpectedly, Materion 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 Materion will offset losses from the drop in Materion's long position.| Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources vs. EMX Royalty Corp |
| Materion vs. Skeena Resources | Materion vs. Compass Minerals International | Materion vs. IperionX Limited American | Materion 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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