Correlation Between Metallurgical and 159681

Can any of the company-specific risk be diversified away by investing in both Metallurgical and 159681 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 Metallurgical and 159681 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Metallurgical of and 159681, you can compare the effects of market volatilities on Metallurgical and 159681 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 Metallurgical with a short position of 159681. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metallurgical and 159681.

Diversification Opportunities for Metallurgical and 159681

0.96

Correlation Coefficient

Metallurgical  159681

Almost no diversification

The 3 months correlation between Metallurgical and 159681 is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Metallurgical of and 159681 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 159681 and Metallurgical 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 Metallurgical of are associated (or correlated) with 159681. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 159681 has no effect on the direction of Metallurgical i.e., Metallurgical and 159681 go up and down completely randomly.

Pair Corralation between Metallurgical and 159681

Assuming the 90 days trading horizon Metallurgical is expected to generate 1.49 times less return on investment than 159681. But when comparing it to its historical volatility, Metallurgical of is 1.66 times less risky than 159681. It trades about 0.17 of its potential returns per unit of risk. 159681 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  66.00  in 159681 on September 14, 2024 and sell it today you would earn a total of  32.00  from holding 159681 or generate 48.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.28%
Values	Daily Returns

Metallurgical of  vs.  159681

Metallurgical

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Metallurgical of are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Metallurgical sustained solid returns over the last few months and may actually be approaching a breakup point.

159681

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 159681 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 159681 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Metallurgical and 159681

The main advantage of trading using opposite Metallurgical and 159681 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metallurgical position performs unexpectedly, 159681 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 159681 will offset losses from the drop in 159681's long position.

The idea behind Metallurgical of and 159681 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.