Correlation Between MUTUIONLINE and CORNISH METALS

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

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

Diversification Opportunities for MUTUIONLINE and CORNISH METALS

0.49

Correlation Coefficient

MUTUIONLINE  CORNISH METALS

Very weak diversification

The 3 months correlation between MUTUIONLINE and CORNISH is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding MUTUIONLINE and CORNISH METALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORNISH METALS INC and MUTUIONLINE 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 MUTUIONLINE are associated (or correlated) with CORNISH METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORNISH METALS INC has no effect on the direction of MUTUIONLINE i.e., MUTUIONLINE and CORNISH METALS go up and down completely randomly.

Pair Corralation between MUTUIONLINE and CORNISH METALS

Assuming the 90 days trading horizon MUTUIONLINE is expected to under-perform the CORNISH METALS. But the stock apears to be less risky and, when comparing its historical volatility, MUTUIONLINE is 2.24 times less risky than CORNISH METALS. The stock trades about -0.11 of its potential returns per unit of risk. The CORNISH METALS INC is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  9.15  in CORNISH METALS INC on December 13, 2024 and sell it today you would lose (1.25) from holding CORNISH METALS INC or give up 13.66% of portfolio value over 90 days.

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

MUTUIONLINE  vs.  CORNISH METALS INC

MUTUIONLINE

Risk-Adjusted Performance

Very Weak

Over the last 90 days MUTUIONLINE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

CORNISH METALS INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days CORNISH METALS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with MUTUIONLINE and CORNISH METALS

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

The idea behind MUTUIONLINE and CORNISH METALS INC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.