Correlation Between Neometals and Bunzl PLC
Can any of the company-specific risk be diversified away by investing in both Neometals and Bunzl PLC 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 Neometals and Bunzl PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neometals and Bunzl PLC, you can compare the effects of market volatilities on Neometals and Bunzl PLC 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 Neometals with a short position of Bunzl PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neometals and Bunzl PLC.
Diversification Opportunities for Neometals and Bunzl PLC
Very good diversification
The 3 months correlation between Neometals and Bunzl is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Neometals and Bunzl PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl PLC and Neometals 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 Neometals are associated (or correlated) with Bunzl PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl PLC has no effect on the direction of Neometals i.e., Neometals and Bunzl PLC go up and down completely randomly.
Pair Corralation between Neometals and Bunzl PLC
Assuming the 90 days trading horizon Neometals is expected to under-perform the Bunzl PLC. In addition to that, Neometals is 1.3 times more volatile than Bunzl PLC. It trades about -0.21 of its total potential returns per unit of risk. Bunzl PLC is currently generating about 0.17 per unit of volatility. If you would invest 342,795 in Bunzl PLC on August 30, 2024 and sell it today you would earn a total of 10,405 from holding Bunzl PLC or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neometals vs. Bunzl PLC
Performance |
| Timeline |
| Neometals |
| Bunzl PLC |
Neometals and Bunzl PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neometals and Bunzl PLC
The main advantage of trading using opposite Neometals and Bunzl PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neometals position performs unexpectedly, Bunzl PLC 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 Bunzl PLC will offset losses from the drop in Bunzl PLC's long position.The idea behind Neometals and Bunzl PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bunzl PLC vs. Lendinvest PLC | Bunzl PLC vs. Neometals | Bunzl PLC vs. Albion Technology General | Bunzl PLC vs. Jupiter Fund Management |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance |