Correlation Between Chrysalis Investments and Future Metals

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

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

Diversification Opportunities for Chrysalis Investments and Future Metals

-0.84

Correlation Coefficient

Chrysalis Investments  Future Metals

Pay attention - limited upside

The 3 months correlation between Chrysalis and Future is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments i.e., Chrysalis Investments and Future Metals go up and down completely randomly.

Pair Corralation between Chrysalis Investments and Future Metals

Assuming the 90 days trading horizon Chrysalis Investments is expected to generate 0.5 times more return on investment than Future Metals. However, Chrysalis Investments is 2.02 times less risky than Future Metals. It trades about 0.09 of its potential returns per unit of risk. Future Metals NL is currently generating about -0.32 per unit of risk. If you would invest  8,940  in Chrysalis Investments on October 25, 2024 and sell it today you would earn a total of  700.00  from holding Chrysalis Investments or generate 7.83% return on investment over 90 days.

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

Chrysalis Investments  vs.  Future Metals NL

Chrysalis Investments

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chrysalis Investments are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Chrysalis Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Future Metals NL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Metals NL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Chrysalis Investments and Future Metals

The main advantage of trading using opposite Chrysalis Investments and Future Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chrysalis Investments 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 Chrysalis Investments 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 Commodity Directory module to find actively traded commodities issued by global exchanges.