Correlation Between Panther Metals and AES Corp
Can any of the company-specific risk be diversified away by investing in both Panther Metals and AES Corp 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 Panther Metals and AES Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panther Metals PLC and AES Corp, you can compare the effects of market volatilities on Panther Metals and AES Corp 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 Panther Metals with a short position of AES Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panther Metals and AES Corp.
Diversification Opportunities for Panther Metals and AES Corp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Panther and AES is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals PLC and AES Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES Corp and Panther Metals 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 Panther Metals PLC are associated (or correlated) with AES Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES Corp has no effect on the direction of Panther Metals i.e., Panther Metals and AES Corp go up and down completely randomly.
Pair Corralation between Panther Metals and AES Corp
Assuming the 90 days trading horizon Panther Metals PLC is expected to generate 2.08 times more return on investment than AES Corp. However, Panther Metals is 2.08 times more volatile than AES Corp. It trades about -0.03 of its potential returns per unit of risk. AES Corp is currently generating about -0.19 per unit of risk. If you would invest 11,000 in Panther Metals PLC on September 12, 2024 and sell it today you would lose (1,500) from holding Panther Metals PLC or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Panther Metals PLC vs. AES Corp
Performance |
| Timeline |
| Panther Metals PLC |
| AES Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Panther Metals and AES Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panther Metals and AES Corp
The main advantage of trading using opposite Panther Metals and AES Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panther Metals position performs unexpectedly, AES Corp 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 AES Corp will offset losses from the drop in AES Corp's long position.| Panther Metals vs. JD Sports Fashion | Panther Metals vs. AcadeMedia AB | Panther Metals vs. Host Hotels Resorts | Panther Metals vs. Wyndham Hotels Resorts |
| AES Corp vs. Park Hotels Resorts | AES Corp vs. Scandinavian Tobacco Group | AES Corp vs. Melia Hotels | AES Corp vs. Lowland Investment Co |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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