Correlation Between Fresnillo PLC and Polymetal International

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

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

Diversification Opportunities for Fresnillo PLC and Polymetal International

0.0

Correlation Coefficient

Fresnillo PLC  Polymetal International

Pay attention - limited upside

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

Pair Corralation between Fresnillo PLC and Polymetal International

If you would invest  781.00  in Fresnillo PLC on December 29, 2024 and sell it today you would earn a total of  457.00  from holding Fresnillo PLC or generate 58.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Fresnillo PLC  vs.  Polymetal International PLC

Fresnillo PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fresnillo PLC are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Fresnillo PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Polymetal International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polymetal International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Polymetal International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fresnillo PLC and Polymetal International

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

The idea behind Fresnillo PLC and Polymetal International 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.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.