Correlation Between Sky Metals and Flagship Investments
Can any of the company-specific risk be diversified away by investing in both Sky Metals and Flagship Investments 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 Sky Metals and Flagship Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sky Metals and Flagship Investments, you can compare the effects of market volatilities on Sky Metals and Flagship Investments 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 Sky Metals with a short position of Flagship Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sky Metals and Flagship Investments.
Diversification Opportunities for Sky Metals and Flagship Investments
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sky and Flagship is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sky Metals and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments and Sky 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 Sky Metals are associated (or correlated) with Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Sky Metals i.e., Sky Metals and Flagship Investments go up and down completely randomly.
Pair Corralation between Sky Metals and Flagship Investments
Assuming the 90 days trading horizon Sky Metals is expected to under-perform the Flagship Investments. In addition to that, Sky Metals is 3.42 times more volatile than Flagship Investments. It trades about -0.06 of its total potential returns per unit of risk. Flagship Investments is currently generating about 0.19 per unit of volatility. If you would invest 200.00 in Flagship Investments on August 30, 2024 and sell it today you would earn a total of 10.00 from holding Flagship Investments or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sky Metals vs. Flagship Investments
Performance |
| Timeline |
| Sky Metals |
| Flagship Investments |
Sky Metals and Flagship Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sky Metals and Flagship Investments
The main advantage of trading using opposite Sky Metals and Flagship Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sky Metals position performs unexpectedly, Flagship Investments 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 Flagship Investments will offset losses from the drop in Flagship Investments' long position.| Sky Metals vs. Northern Star Resources | Sky Metals vs. Evolution Mining | Sky Metals vs. Bluescope Steel | Sky Metals vs. Sandfire Resources NL |
| Flagship Investments vs. ACDC Metals | Flagship Investments vs. Health and Plant | Flagship Investments vs. Aeon Metals | Flagship Investments vs. Sky Metals |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |