Correlation Between MINCO SILVER and BASF SE
Can any of the company-specific risk be diversified away by investing in both MINCO SILVER and BASF SE 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 MINCO SILVER and BASF SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MINCO SILVER and BASF SE, you can compare the effects of market volatilities on MINCO SILVER and BASF SE 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 MINCO SILVER with a short position of BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MINCO SILVER and BASF SE.
Diversification Opportunities for MINCO SILVER and BASF SE
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between MINCO and BASF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MINCO SILVER and BASF SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE and MINCO SILVER 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 MINCO SILVER are associated (or correlated) with BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE has no effect on the direction of MINCO SILVER i.e., MINCO SILVER and BASF SE go up and down completely randomly.
Pair Corralation between MINCO SILVER and BASF SE
Assuming the 90 days trading horizon MINCO SILVER is expected to generate 2.29 times more return on investment than BASF SE. However, MINCO SILVER is 2.29 times more volatile than BASF SE. It trades about 0.05 of its potential returns per unit of risk. BASF SE is currently generating about -0.03 per unit of risk. If you would invest 12.00 in MINCO SILVER on August 29, 2024 and sell it today you would earn a total of 1.00 from holding MINCO SILVER or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
MINCO SILVER vs. BASF SE
Performance |
| Timeline |
| MINCO SILVER |
| BASF SE |
MINCO SILVER and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MINCO SILVER and BASF SE
The main advantage of trading using opposite MINCO SILVER and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MINCO SILVER position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE's long position.| MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Superior Plus Corp | MINCO SILVER vs. SIVERS SEMICONDUCTORS AB |
| BASF SE vs. ATRYS HEALTH SA | BASF SE vs. Bumrungrad Hospital Public | BASF SE vs. MAGNUM MINING EXP | BASF SE vs. FISH PAYK HEALTH |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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