Correlation Between CAP LEASE and Panther Metals

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

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

Diversification Opportunities for CAP LEASE and Panther Metals

-0.23

Correlation Coefficient

CAP LEASE  Panther Metals

Very good diversification

The 3 months correlation between CAP and Panther is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC and CAP LEASE 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 CAP LEASE AVIATION are associated (or correlated) with Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of CAP LEASE i.e., CAP LEASE and Panther Metals go up and down completely randomly.

Pair Corralation between CAP LEASE and Panther Metals

Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the Panther Metals. But the stock apears to be less risky and, when comparing its historical volatility, CAP LEASE AVIATION is 2.52 times less risky than Panther Metals. The stock trades about -0.19 of its potential returns per unit of risk. The Panther Metals PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  10,000  in Panther Metals PLC on September 5, 2024 and sell it today you would earn a total of  1,000.00  from holding Panther Metals PLC or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CAP LEASE AVIATION  vs.  Panther Metals PLC

CAP LEASE AVIATION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAP LEASE AVIATION has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Panther Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Panther Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Panther Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CAP LEASE and Panther Metals

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

The idea behind CAP LEASE AVIATION and Panther Metals PLC 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.