Correlation Between Central Asia and Fulcrum Metals

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

By analyzing existing cross correlation between Central Asia Metals and Fulcrum Metals PLC, you can compare the effects of market volatilities on Central Asia and Fulcrum 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 Central Asia with a short position of Fulcrum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and Fulcrum Metals.

Diversification Opportunities for Central Asia and Fulcrum Metals

-0.44

Correlation Coefficient

Central Asia  Fulcrum Metals

Very good diversification

The 3 months correlation between Central and Fulcrum is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals PLC and Central Asia 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 Central Asia Metals are associated (or correlated) with Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of Central Asia i.e., Central Asia and Fulcrum Metals go up and down completely randomly.

Pair Corralation between Central Asia and Fulcrum Metals

Assuming the 90 days trading horizon Central Asia Metals is expected to generate 0.48 times more return on investment than Fulcrum Metals. However, Central Asia Metals is 2.08 times less risky than Fulcrum Metals. It trades about 0.08 of its potential returns per unit of risk. Fulcrum Metals PLC is currently generating about -0.15 per unit of risk. If you would invest  15,300  in Central Asia Metals on December 30, 2024 and sell it today you would earn a total of  1,480  from holding Central Asia Metals or generate 9.67% return on investment over 90 days.

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

Central Asia Metals  vs.  Fulcrum Metals PLC

Central Asia Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Central Asia Metals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Central Asia may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Fulcrum Metals PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fulcrum 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Central Asia and Fulcrum Metals

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

The idea behind Central Asia Metals and Fulcrum Metals PLC 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.