Correlation Between Cosmo Metals and Metro Mining

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cosmo Metals and Metro Mining 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 Cosmo Metals and Metro Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosmo Metals and Metro Mining, you can compare the effects of market volatilities on Cosmo Metals and Metro Mining 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 Cosmo Metals with a short position of Metro Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosmo Metals and Metro Mining.

Diversification Opportunities for Cosmo Metals and Metro Mining

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cosmo and Metro is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Cosmo Metals and Metro Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Mining and Cosmo 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 Cosmo Metals are associated (or correlated) with Metro Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Mining has no effect on the direction of Cosmo Metals i.e., Cosmo Metals and Metro Mining go up and down completely randomly.

Pair Corralation between Cosmo Metals and Metro Mining

Assuming the 90 days trading horizon Cosmo Metals is expected to generate 1.89 times more return on investment than Metro Mining. However, Cosmo Metals is 1.89 times more volatile than Metro Mining. It trades about 0.08 of its potential returns per unit of risk. Metro Mining is currently generating about -0.2 per unit of risk. If you would invest  1.90  in Cosmo Metals on October 11, 2024 and sell it today you would earn a total of  0.10  from holding Cosmo Metals or generate 5.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cosmo Metals  vs.  Metro Mining

 Performance 
       Timeline  
Cosmo Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cosmo Metals 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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Metro Mining 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Metro Mining are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Metro Mining unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cosmo Metals and Metro Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cosmo Metals and Metro Mining

The main advantage of trading using opposite Cosmo Metals and Metro Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosmo Metals position performs unexpectedly, Metro Mining 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 Metro Mining will offset losses from the drop in Metro Mining's long position.
The idea behind Cosmo Metals and Metro Mining 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Bonds Directory
Find actively traded corporate debentures issued by US companies
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Content Syndication
Quickly integrate customizable finance content to your own investment portal