Correlation Between Pampa Metals and CAT Strategic
Can any of the company-specific risk be diversified away by investing in both Pampa Metals and CAT Strategic 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 Pampa Metals and CAT Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pampa Metals and CAT Strategic Metals, you can compare the effects of market volatilities on Pampa Metals and CAT Strategic 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 Pampa Metals with a short position of CAT Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Metals and CAT Strategic.
Diversification Opportunities for Pampa Metals and CAT Strategic
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pampa and CAT is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Metals and CAT Strategic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAT Strategic Metals and Pampa 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 Pampa Metals are associated (or correlated) with CAT Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAT Strategic Metals has no effect on the direction of Pampa Metals i.e., Pampa Metals and CAT Strategic go up and down completely randomly.
Pair Corralation between Pampa Metals and CAT Strategic
Assuming the 90 days horizon Pampa Metals is expected to generate 1.31 times less return on investment than CAT Strategic. In addition to that, Pampa Metals is 1.47 times more volatile than CAT Strategic Metals. It trades about 0.06 of its total potential returns per unit of risk. CAT Strategic Metals is currently generating about 0.12 per unit of volatility. If you would invest 0.56 in CAT Strategic Metals on August 25, 2024 and sell it today you would lose (0.16) from holding CAT Strategic Metals or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pampa Metals vs. CAT Strategic Metals
Performance |
| Timeline |
| Pampa Metals |
| CAT Strategic Metals |
Pampa Metals and CAT Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pampa Metals and CAT Strategic
The main advantage of trading using opposite Pampa Metals and CAT Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Metals position performs unexpectedly, CAT Strategic 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 CAT Strategic will offset losses from the drop in CAT Strategic's long position.| Pampa Metals vs. Surge Battery Metals | Pampa Metals vs. United Royale Holdings | Pampa Metals vs. Hillcrest Energy Technologies | Pampa Metals vs. Star Alliance International |
| CAT Strategic vs. Glen Eagle Resources | CAT Strategic vs. Grizzly Discoveries | CAT Strategic vs. Silver Dollar Resources | CAT Strategic vs. Defense Metals 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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