Correlation Between STRAITS TRADG and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both STRAITS TRADG and ADRIATIC METALS 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 STRAITS TRADG and ADRIATIC METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAITS TRADG SD and ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on STRAITS TRADG and ADRIATIC METALS 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 STRAITS TRADG with a short position of ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAITS TRADG and ADRIATIC METALS.
Diversification Opportunities for STRAITS TRADG and ADRIATIC METALS
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STRAITS and ADRIATIC is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding STRAITS TRADG SD and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS and STRAITS TRADG 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 STRAITS TRADG SD are associated (or correlated) with ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of STRAITS TRADG i.e., STRAITS TRADG and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between STRAITS TRADG and ADRIATIC METALS
Assuming the 90 days horizon STRAITS TRADG SD is expected to generate 0.31 times more return on investment than ADRIATIC METALS. However, STRAITS TRADG SD is 3.21 times less risky than ADRIATIC METALS. It trades about 0.05 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about -0.08 per unit of risk. If you would invest 97.00 in STRAITS TRADG SD on August 31, 2024 and sell it today you would earn a total of 1.00 from holding STRAITS TRADG SD or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAITS TRADG SD vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| STRAITS TRADG SD |
| ADRIATIC METALS LS |
STRAITS TRADG and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAITS TRADG and ADRIATIC METALS
The main advantage of trading using opposite STRAITS TRADG and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAITS TRADG position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| STRAITS TRADG vs. Rio Tinto Group | STRAITS TRADG vs. Liontown Resources Limited | STRAITS TRADG vs. American Lithium Corp |
| ADRIATIC METALS vs. Rio Tinto Group | ADRIATIC METALS vs. Liontown Resources Limited | ADRIATIC METALS vs. American Lithium Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |