Correlation Between ARDAGH METAL and MOAB MINERALS

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

By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and MOAB MINERALS LTD, you can compare the effects of market volatilities on ARDAGH METAL and MOAB MINERALS 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 ARDAGH METAL with a short position of MOAB MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and MOAB MINERALS.

Diversification Opportunities for ARDAGH METAL and MOAB MINERALS

0.41

Correlation Coefficient

ARDAGH METAL  MOAB MINERALS

Very weak diversification

The 3 months correlation between ARDAGH and MOAB is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and MOAB MINERALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOAB MINERALS LTD and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 are associated (or correlated) with MOAB MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOAB MINERALS LTD has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and MOAB MINERALS go up and down completely randomly.

Pair Corralation between ARDAGH METAL and MOAB MINERALS

Assuming the 90 days horizon ARDAGH METAL is expected to generate 207.49 times less return on investment than MOAB MINERALS. But when comparing it to its historical volatility, ARDAGH METAL PACDL 0001 is 11.81 times less risky than MOAB MINERALS. It trades about 0.01 of its potential returns per unit of risk. MOAB MINERALS LTD is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.35  in MOAB MINERALS LTD on September 24, 2024 and sell it today you would lose (0.30) from holding MOAB MINERALS LTD or give up 85.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.63%
Values	Daily Returns

ARDAGH METAL PACDL 0001  vs.  MOAB MINERALS LTD

ARDAGH METAL PACDL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ARDAGH METAL PACDL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ARDAGH METAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

MOAB MINERALS LTD

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MOAB MINERALS LTD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOAB MINERALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ARDAGH METAL and MOAB MINERALS

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

The idea behind ARDAGH METAL PACDL 0001 and MOAB MINERALS LTD 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..