Correlation Between Synthomer Plc and Metals Exploration
Can any of the company-specific risk be diversified away by investing in both Synthomer Plc and Metals Exploration 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 Synthomer Plc and Metals Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Synthomer plc and Metals Exploration Plc, you can compare the effects of market volatilities on Synthomer Plc and Metals Exploration 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 Synthomer Plc with a short position of Metals Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synthomer Plc and Metals Exploration.
Diversification Opportunities for Synthomer Plc and Metals Exploration
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Synthomer and Metals is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Synthomer plc and Metals Exploration Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Exploration Plc and Synthomer Plc 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 Synthomer plc are associated (or correlated) with Metals Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Exploration Plc has no effect on the direction of Synthomer Plc i.e., Synthomer Plc and Metals Exploration go up and down completely randomly.
Pair Corralation between Synthomer Plc and Metals Exploration
Assuming the 90 days trading horizon Synthomer plc is expected to generate 1.16 times more return on investment than Metals Exploration. However, Synthomer Plc is 1.16 times more volatile than Metals Exploration Plc. It trades about -0.04 of its potential returns per unit of risk. Metals Exploration Plc is currently generating about -0.13 per unit of risk. If you would invest 17,720 in Synthomer plc on August 28, 2024 and sell it today you would lose (640.00) from holding Synthomer plc or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Synthomer plc vs. Metals Exploration Plc
Performance |
| Timeline |
| Synthomer plc |
| Metals Exploration Plc |
Synthomer Plc and Metals Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Synthomer Plc and Metals Exploration
The main advantage of trading using opposite Synthomer Plc and Metals Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synthomer Plc position performs unexpectedly, Metals Exploration 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 Exploration will offset losses from the drop in Metals Exploration's long position.| Synthomer Plc vs. Ross Stores | Synthomer Plc vs. Schroders Investment Trusts | Synthomer Plc vs. Smithson Investment Trust | Synthomer Plc vs. Oakley Capital Investments |
| Metals Exploration vs. Givaudan SA | Metals Exploration vs. Antofagasta PLC | Metals Exploration vs. Centamin PLC | Metals Exploration vs. Atalaya Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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