Correlation Between Power Metal and Panther Metals
Can any of the company-specific risk be diversified away by investing in both Power Metal and Panther Metals 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 Power Metal and Panther Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Metal Resources and Panther Metals PLC, you can compare the effects of market volatilities on Power Metal and Panther Metals 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 Power Metal with a short position of Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Metal and Panther Metals.
Diversification Opportunities for Power Metal and Panther Metals
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Power and Panther is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Power Metal Resources and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC and Power Metal 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 Power Metal Resources are associated (or correlated) with Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Power Metal i.e., Power Metal and Panther Metals go up and down completely randomly.
Pair Corralation between Power Metal and Panther Metals
Assuming the 90 days trading horizon Power Metal is expected to generate 1.6 times less return on investment than Panther Metals. But when comparing it to its historical volatility, Power Metal Resources is 1.19 times less risky than Panther Metals. It trades about 0.11 of its potential returns per unit of risk. Panther Metals PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 10,000 in Panther Metals PLC on August 31, 2024 and sell it today you would earn a total of 1,500 from holding Panther Metals PLC or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Metal Resources vs. Panther Metals PLC
Performance |
| Timeline |
| Power Metal Resources |
| Panther Metals PLC |
Power Metal and Panther Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Metal and Panther Metals
The main advantage of trading using opposite Power Metal and Panther Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Metal position performs unexpectedly, Panther Metals 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 Panther Metals will offset losses from the drop in Panther Metals' long position.| Power Metal vs. Hollywood Bowl Group | Power Metal vs. Centaur Media | Power Metal vs. Air Products Chemicals | Power Metal vs. Ecclesiastical Insurance Office |
| Panther Metals vs. Live Nation Entertainment | Panther Metals vs. G5 Entertainment AB | Panther Metals vs. Cornish Metals | Panther Metals vs. JD Sports Fashion |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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