Correlation Between Panther Metals and Future Metals

Can any of the company-specific risk be diversified away by investing in both Panther Metals and Future 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 Panther Metals and Future Metals 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 Future Metals NL, you can compare the effects of market volatilities on Panther Metals and Future 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 Panther Metals with a short position of Future Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panther Metals and Future Metals.

Diversification Opportunities for Panther Metals and Future Metals

-0.02

Correlation Coefficient

Panther Metals  Future Metals

Good diversification

The 3 months correlation between Panther and Future is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals PLC and Future Metals NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Metals NL 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 Future Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Metals NL has no effect on the direction of Panther Metals i.e., Panther Metals and Future Metals go up and down completely randomly.

Pair Corralation between Panther Metals and Future Metals

Assuming the 90 days trading horizon Panther Metals is expected to generate 1.19 times less return on investment than Future Metals. In addition to that, Panther Metals is 1.61 times more volatile than Future Metals NL. It trades about 0.03 of its total potential returns per unit of risk. Future Metals NL is currently generating about 0.06 per unit of volatility. If you would invest  88.00  in Future Metals NL on September 3, 2024 and sell it today you would earn a total of  7.00  from holding Future Metals NL or generate 7.95% return on investment over 90 days.

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

Panther Metals PLC  vs.  Future Metals NL

Panther Metals PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Panther Metals PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Panther Metals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Future Metals NL

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Future Metals NL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Future Metals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Panther Metals and Future Metals

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

The idea behind Panther Metals PLC and Future Metals NL 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.