Correlation Between Sherritt International and Metals X
Can any of the company-specific risk be diversified away by investing in both Sherritt International and Metals X 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 Sherritt International and Metals X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sherritt International and Metals X Limited, you can compare the effects of market volatilities on Sherritt International and Metals X 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 Sherritt International with a short position of Metals X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherritt International and Metals X.
Diversification Opportunities for Sherritt International and Metals X
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sherritt and Metals is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sherritt International and Metals X Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals X Limited and Sherritt International 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 Sherritt International are associated (or correlated) with Metals X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals X Limited has no effect on the direction of Sherritt International i.e., Sherritt International and Metals X go up and down completely randomly.
Pair Corralation between Sherritt International and Metals X
Assuming the 90 days horizon Sherritt International is expected to under-perform the Metals X. In addition to that, Sherritt International is 1.11 times more volatile than Metals X Limited. It trades about -0.18 of its total potential returns per unit of risk. Metals X Limited is currently generating about 0.16 per unit of volatility. If you would invest 30.00 in Metals X Limited on November 28, 2024 and sell it today you would earn a total of 4.00 from holding Metals X Limited or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sherritt International vs. Metals X Limited
Performance |
| Timeline |
| Sherritt International |
| Metals X Limited |
Sherritt International and Metals X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherritt International and Metals X
The main advantage of trading using opposite Sherritt International and Metals X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherritt International position performs unexpectedly, Metals X 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 Metals X will offset losses from the drop in Metals X's long position.| Sherritt International vs. Metals X Limited | Sherritt International vs. Interra Copper Corp | Sherritt International vs. Anglo American PLC | Sherritt International vs. OM Holdings Limited |
| Metals X vs. Eramet SA ADR | Metals X vs. NGEx Minerals | Metals X vs. Forum Energy Metals | Metals X vs. Adriatic Metals Plc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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