Correlation Between Pegasus Resources and Euro Manganese
Can any of the company-specific risk be diversified away by investing in both Pegasus Resources and Euro Manganese 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 Pegasus Resources and Euro Manganese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pegasus Resources and Euro Manganese, you can compare the effects of market volatilities on Pegasus Resources and Euro Manganese 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 Pegasus Resources with a short position of Euro Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pegasus Resources and Euro Manganese.
Diversification Opportunities for Pegasus Resources and Euro Manganese
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pegasus and Euro is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Pegasus Resources and Euro Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euro Manganese and Pegasus Resources 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 Pegasus Resources are associated (or correlated) with Euro Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euro Manganese has no effect on the direction of Pegasus Resources i.e., Pegasus Resources and Euro Manganese go up and down completely randomly.
Pair Corralation between Pegasus Resources and Euro Manganese
Assuming the 90 days horizon Pegasus Resources is expected to generate 16.63 times more return on investment than Euro Manganese. However, Pegasus Resources is 16.63 times more volatile than Euro Manganese. It trades about 0.15 of its potential returns per unit of risk. Euro Manganese is currently generating about -0.02 per unit of risk. If you would invest 3.37 in Pegasus Resources on September 1, 2024 and sell it today you would earn a total of 6.63 from holding Pegasus Resources or generate 196.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Pegasus Resources vs. Euro Manganese
Performance |
| Timeline |
| Pegasus Resources |
| Euro Manganese |
Pegasus Resources and Euro Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pegasus Resources and Euro Manganese
The main advantage of trading using opposite Pegasus Resources and Euro Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pegasus Resources position performs unexpectedly, Euro Manganese 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 Euro Manganese will offset losses from the drop in Euro Manganese's long position.| Pegasus Resources vs. ATT Inc | Pegasus Resources vs. Merck Company | Pegasus Resources vs. Walt Disney | Pegasus Resources vs. Caterpillar |
| Euro Manganese vs. Bravada Gold | Euro Manganese vs. Silver Spruce Resources | Euro Manganese vs. Monitor Ventures | Euro Manganese vs. Pershing Resources |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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