Correlation Between Neometals and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Neometals and International Consolidated 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 International Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neometals and International Consolidated Airlines, you can compare the effects of market volatilities on Neometals and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neometals and International Consolidated.
Diversification Opportunities for Neometals and International Consolidated
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neometals and International is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Neometals and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Neometals i.e., Neometals and International Consolidated go up and down completely randomly.
Pair Corralation between Neometals and International Consolidated
Assuming the 90 days trading horizon Neometals is expected to under-perform the International Consolidated. But the stock apears to be less risky and, when comparing its historical volatility, Neometals is 1.86 times less risky than International Consolidated. The stock trades about -0.21 of its potential returns per unit of risk. The International Consolidated Airlines is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 21,530 in International Consolidated Airlines on August 29, 2024 and sell it today you would earn a total of 3,760 from holding International Consolidated Airlines or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Neometals vs. International Consolidated Air
Performance |
| Timeline |
| Neometals |
| International Consolidated |
Neometals and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neometals and International Consolidated
The main advantage of trading using opposite Neometals and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neometals position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.The idea behind Neometals and International Consolidated Airlines 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.| International Consolidated vs. Lendinvest PLC | International Consolidated vs. Neometals | International Consolidated vs. Coor Service Management | International Consolidated vs. Albion Technology General |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges |