Correlation Between Sovereign Metals and Macerich
Can any of the company-specific risk be diversified away by investing in both Sovereign Metals and Macerich 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 Sovereign Metals and Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sovereign Metals and Macerich Co, you can compare the effects of market volatilities on Sovereign Metals and Macerich 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 Sovereign Metals with a short position of Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sovereign Metals and Macerich.
Diversification Opportunities for Sovereign Metals and Macerich
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sovereign and Macerich is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sovereign Metals and Macerich Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich and Sovereign 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 Sovereign Metals are associated (or correlated) with Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Sovereign Metals i.e., Sovereign Metals and Macerich go up and down completely randomly.
Pair Corralation between Sovereign Metals and Macerich
Assuming the 90 days trading horizon Sovereign Metals is expected to generate 1.38 times less return on investment than Macerich. In addition to that, Sovereign Metals is 1.07 times more volatile than Macerich Co. It trades about 0.13 of its total potential returns per unit of risk. Macerich Co is currently generating about 0.19 per unit of volatility. If you would invest 1,983 in Macerich Co on September 13, 2024 and sell it today you would earn a total of 152.00 from holding Macerich Co or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sovereign Metals vs. Macerich Co
Performance |
| Timeline |
| Sovereign Metals |
| Macerich |
Sovereign Metals and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sovereign Metals and Macerich
The main advantage of trading using opposite Sovereign Metals and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sovereign Metals position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.| Sovereign Metals vs. Givaudan SA | Sovereign Metals vs. Antofagasta PLC | Sovereign Metals vs. Ferrexpo PLC | Sovereign Metals vs. Atalaya Mining |
| Macerich vs. Sovereign Metals | Macerich vs. Wheaton Precious Metals | Macerich vs. Golden Metal Resources | Macerich vs. Europa 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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