Correlation Between Pampa Metals and Pegasus Resources
Can any of the company-specific risk be diversified away by investing in both Pampa Metals and Pegasus Resources 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 Pegasus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pampa Metals and Pegasus Resources, you can compare the effects of market volatilities on Pampa Metals and Pegasus Resources 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 Pegasus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pampa Metals and Pegasus Resources.
Diversification Opportunities for Pampa Metals and Pegasus Resources
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pampa and Pegasus is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Pampa Metals and Pegasus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Resources 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 Pegasus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Resources has no effect on the direction of Pampa Metals i.e., Pampa Metals and Pegasus Resources go up and down completely randomly.
Pair Corralation between Pampa Metals and Pegasus Resources
Assuming the 90 days horizon Pampa Metals is expected to under-perform the Pegasus Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Pampa Metals is 6.75 times less risky than Pegasus Resources. The otc stock trades about -0.03 of its potential returns per unit of risk. The Pegasus Resources is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Pegasus Resources on September 1, 2024 and sell it today you would lose (4.00) from holding Pegasus Resources or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Pampa Metals vs. Pegasus Resources
Performance |
| Timeline |
| Pampa Metals |
| Pegasus Resources |
Pampa Metals and Pegasus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pampa Metals and Pegasus Resources
The main advantage of trading using opposite Pampa Metals and Pegasus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pampa Metals position performs unexpectedly, Pegasus Resources 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 Pegasus Resources will offset losses from the drop in Pegasus Resources' 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 |
| Pegasus Resources vs. ATT Inc | Pegasus Resources vs. Merck Company | Pegasus Resources vs. Walt Disney | Pegasus Resources vs. Caterpillar |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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