Correlation Between ACG Metals and BANNER

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

By analyzing existing cross correlation between ACG Metals Limited and BANNER 2907 01 JAN 42, you can compare the effects of market volatilities on ACG Metals and BANNER 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 ACG Metals with a short position of BANNER. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACG Metals and BANNER.

Diversification Opportunities for ACG Metals and BANNER

0.0

Correlation Coefficient

ACG Metals  BANNER

Pay attention - limited upside

The 3 months correlation between ACG and BANNER is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ACG Metals Limited and BANNER 2907 01 JAN 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANNER 2907 01 and ACG 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 ACG Metals Limited are associated (or correlated) with BANNER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANNER 2907 01 has no effect on the direction of ACG Metals i.e., ACG Metals and BANNER go up and down completely randomly.

Pair Corralation between ACG Metals and BANNER

If you would invest  7,138  in BANNER 2907 01 JAN 42 on December 30, 2024 and sell it today you would earn a total of  43.00  from holding BANNER 2907 01 JAN 42 or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	25.81%
Values	Daily Returns

ACG Metals Limited  vs.  BANNER 2907 01 JAN 42

ACG Metals Limited

Risk-Adjusted Performance

Very Weak

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

BANNER 2907 01

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BANNER 2907 01 JAN 42 are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BANNER is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ACG Metals and BANNER

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

The idea behind ACG Metals Limited and BANNER 2907 01 JAN 42 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 Transaction History module to view history of all your transactions and understand their impact on performance.