Correlation Between Euro Manganese and Neometals
Can any of the company-specific risk be diversified away by investing in both Euro Manganese and Neometals 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 Euro Manganese and Neometals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euro Manganese and Neometals Ltd ADR, you can compare the effects of market volatilities on Euro Manganese and Neometals 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 Euro Manganese with a short position of Neometals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euro Manganese and Neometals.
Diversification Opportunities for Euro Manganese and Neometals
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Euro and Neometals is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Euro Manganese and Neometals Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neometals ADR and Euro Manganese 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 Euro Manganese are associated (or correlated) with Neometals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neometals ADR has no effect on the direction of Euro Manganese i.e., Euro Manganese and Neometals go up and down completely randomly.
Pair Corralation between Euro Manganese and Neometals
If you would invest 3.50 in Euro Manganese on September 15, 2024 and sell it today you would lose (0.60) from holding Euro Manganese or give up 17.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 1.56% |
Values | Daily Returns |
Euro Manganese vs. Neometals Ltd ADR
Performance |
Timeline |
Euro Manganese |
Neometals ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Euro Manganese and Neometals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Euro Manganese and Neometals
The main advantage of trading using opposite Euro Manganese and Neometals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euro Manganese position performs unexpectedly, Neometals 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 Neometals will offset losses from the drop in Neometals' long position.Euro Manganese vs. Qubec Nickel Corp | Euro Manganese vs. IGO Limited | Euro Manganese vs. Focus Graphite | Euro Manganese vs. Mineral Res |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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