Correlation Between SCIENCE IN and Minerals Technologies

Can any of the company-specific risk be diversified away by investing in both SCIENCE IN and Minerals Technologies 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 SCIENCE IN and Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SCIENCE IN SPORT and Minerals Technologies, you can compare the effects of market volatilities on SCIENCE IN and Minerals Technologies 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 SCIENCE IN with a short position of Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCIENCE IN and Minerals Technologies.

Diversification Opportunities for SCIENCE IN and Minerals Technologies

0.31

Correlation Coefficient

SCIENCE IN  Minerals Technologies

Weak diversification

The 3 months correlation between SCIENCE and Minerals is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SCIENCE IN SPORT and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies and SCIENCE IN 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 SCIENCE IN SPORT are associated (or correlated) with Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of SCIENCE IN i.e., SCIENCE IN and Minerals Technologies go up and down completely randomly.

Pair Corralation between SCIENCE IN and Minerals Technologies

Assuming the 90 days horizon SCIENCE IN is expected to generate 1.89 times less return on investment than Minerals Technologies. In addition to that, SCIENCE IN is 2.27 times more volatile than Minerals Technologies. It trades about 0.01 of its total potential returns per unit of risk. Minerals Technologies is currently generating about 0.03 per unit of volatility. If you would invest  7,189  in Minerals Technologies on October 25, 2024 and sell it today you would earn a total of  211.00  from holding Minerals Technologies or generate 2.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SCIENCE IN SPORT  vs.  Minerals Technologies

SCIENCE IN SPORT

Risk-Adjusted Performance

0 of 100

Weak

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

Minerals Technologies

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Minerals Technologies are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Minerals Technologies is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SCIENCE IN and Minerals Technologies

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

The idea behind SCIENCE IN SPORT and Minerals Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.