Correlation Between Tombador Iron and Collins Foods
Can any of the company-specific risk be diversified away by investing in both Tombador Iron and Collins Foods 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 Tombador Iron and Collins Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tombador Iron and Collins Foods, you can compare the effects of market volatilities on Tombador Iron and Collins Foods 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 Tombador Iron with a short position of Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tombador Iron and Collins Foods.
Diversification Opportunities for Tombador Iron and Collins Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tombador and Collins is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tombador Iron and Collins Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods and Tombador Iron 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 Tombador Iron are associated (or correlated) with Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods has no effect on the direction of Tombador Iron i.e., Tombador Iron and Collins Foods go up and down completely randomly.
Pair Corralation between Tombador Iron and Collins Foods
Assuming the 90 days trading horizon Tombador Iron is expected to generate 25.74 times more return on investment than Collins Foods. However, Tombador Iron is 25.74 times more volatile than Collins Foods. It trades about 0.05 of its potential returns per unit of risk. Collins Foods is currently generating about 0.02 per unit of risk. If you would invest 2.00 in Tombador Iron on August 31, 2024 and sell it today you would earn a total of 33.00 from holding Tombador Iron or generate 1650.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Tombador Iron vs. Collins Foods
Performance |
| Timeline |
| Tombador Iron |
| Collins Foods |
Tombador Iron and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tombador Iron and Collins Foods
The main advantage of trading using opposite Tombador Iron and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tombador Iron position performs unexpectedly, Collins Foods 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| Tombador Iron vs. Northern Star Resources | Tombador Iron vs. Evolution Mining | Tombador Iron vs. Bluescope Steel | Tombador Iron vs. De Grey Mining |
| Collins Foods vs. Aneka Tambang Tbk | Collins Foods vs. Unibail Rodamco Westfield SE | Collins Foods vs. Macquarie Group | Collins Foods vs. Commonwealth Bank |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |