Correlation Between Metro Mining and PM Capital
Can any of the company-specific risk be diversified away by investing in both Metro Mining and PM Capital 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 Metro Mining and PM Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Mining and PM Capital Global, you can compare the effects of market volatilities on Metro Mining and PM Capital 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 Metro Mining with a short position of PM Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Mining and PM Capital.
Diversification Opportunities for Metro Mining and PM Capital
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metro and PGF is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Metro Mining and PM Capital Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PM Capital Global and Metro Mining 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 Metro Mining are associated (or correlated) with PM Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PM Capital Global has no effect on the direction of Metro Mining i.e., Metro Mining and PM Capital go up and down completely randomly.
Pair Corralation between Metro Mining and PM Capital
Assuming the 90 days trading horizon Metro Mining is expected to generate 4.3 times less return on investment than PM Capital. In addition to that, Metro Mining is 2.19 times more volatile than PM Capital Global. It trades about 0.02 of its total potential returns per unit of risk. PM Capital Global is currently generating about 0.16 per unit of volatility. If you would invest 218.00 in PM Capital Global on December 28, 2024 and sell it today you would earn a total of 35.00 from holding PM Capital Global or generate 16.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Metro Mining vs. PM Capital Global
Performance |
Timeline |
Metro Mining |
PM Capital Global |
Metro Mining and PM Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Metro Mining and PM Capital
The main advantage of trading using opposite Metro Mining and PM Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Mining position performs unexpectedly, PM Capital 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 PM Capital will offset losses from the drop in PM Capital's long position.Metro Mining vs. Argo Investments | Metro Mining vs. Carlton Investments | Metro Mining vs. Clime Investment Management | Metro Mining vs. Asian Battery Metals |
PM Capital vs. Aurelia Metals | PM Capital vs. Advanced Braking Technology | PM Capital vs. EROAD | PM Capital vs. Hammer Metals |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |