Correlation Between United States and Sherritt International
Can any of the company-specific risk be diversified away by investing in both United States and Sherritt International 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 United States and Sherritt International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Antimony and Sherritt International, you can compare the effects of market volatilities on United States and Sherritt International 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 United States with a short position of Sherritt International. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Sherritt International.
Diversification Opportunities for United States and Sherritt International
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Sherritt is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding United States Antimony and Sherritt International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherritt International and United States 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 United States Antimony are associated (or correlated) with Sherritt International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherritt International has no effect on the direction of United States i.e., United States and Sherritt International go up and down completely randomly.
Pair Corralation between United States and Sherritt International
Given the investment horizon of 90 days United States Antimony is expected to generate 0.52 times more return on investment than Sherritt International. However, United States Antimony is 1.91 times less risky than Sherritt International. It trades about 0.13 of its potential returns per unit of risk. Sherritt International is currently generating about 0.0 per unit of risk. If you would invest 34.00 in United States Antimony on September 1, 2024 and sell it today you would earn a total of 42.00 from holding United States Antimony or generate 123.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Antimony vs. Sherritt International
Performance |
| Timeline |
| United States Antimony |
| Sherritt International |
United States and Sherritt International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Sherritt International
The main advantage of trading using opposite United States and Sherritt International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Sherritt International 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 Sherritt International will offset losses from the drop in Sherritt International's long position.| United States vs. Syrah Resources Limited | United States vs. Nouveau Monde Graphite | United States vs. Trilogy Metals | United States vs. Global Atomic Corp |
| Sherritt International vs. South32 Limited | Sherritt International vs. NioCorp Developments Ltd | Sherritt International vs. HUMANA INC | Sherritt International vs. SCOR PK |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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