Correlation Between Panther Metals and Fortune Brands

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Can any of the company-specific risk be diversified away by investing in both Panther Metals and Fortune Brands 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 Panther Metals and Fortune Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panther Metals PLC and Fortune Brands Home, you can compare the effects of market volatilities on Panther Metals and Fortune Brands 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 Panther Metals with a short position of Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panther Metals and Fortune Brands.

Diversification Opportunities for Panther Metals and Fortune Brands

PantherFortuneDiversified AwayPantherFortuneDiversified Away100%
-0.77
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Panther and Fortune is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals PLC and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home and Panther Metals 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 Panther Metals PLC are associated (or correlated) with Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of Panther Metals i.e., Panther Metals and Fortune Brands go up and down completely randomly.

Pair Corralation between Panther Metals and Fortune Brands

Assuming the 90 days trading horizon Panther Metals PLC is expected to under-perform the Fortune Brands. In addition to that, Panther Metals is 3.0 times more volatile than Fortune Brands Home. It trades about -0.06 of its total potential returns per unit of risk. Fortune Brands Home is currently generating about -0.1 per unit of volatility. If you would invest  8,384  in Fortune Brands Home on September 15, 2024 and sell it today you would lose (801.00) from holding Fortune Brands Home or give up 9.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy87.69%
ValuesDaily Returns

Panther Metals PLC  vs.  Fortune Brands Home

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -30-20-10010
JavaScript chart by amCharts 3.21.15PALM 0IRN
       Timeline  
Panther Metals PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec708090100110120130
Fortune Brands Home 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fortune Brands Home has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec747678808284868890

Panther Metals and Fortune Brands Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-7.85-5.88-3.91-1.94-0.03281.783.635.487.329.17 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15PALM 0IRN
       Returns  

Pair Trading with Panther Metals and Fortune Brands

The main advantage of trading using opposite Panther Metals and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panther Metals position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.
The idea behind Panther Metals PLC and Fortune Brands Home 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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