Correlation Between Made Tech and Panther Metals

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

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

Diversification Opportunities for Made Tech and Panther Metals

0.31

Correlation Coefficient

Made Tech  Panther Metals

Weak diversification

The 3 months correlation between Made and Panther is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC and Made Tech 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 Made Tech Group are associated (or correlated) with Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Made Tech i.e., Made Tech and Panther Metals go up and down completely randomly.

Pair Corralation between Made Tech and Panther Metals

Assuming the 90 days trading horizon Made Tech is expected to generate 62.89 times less return on investment than Panther Metals. But when comparing it to its historical volatility, Made Tech Group is 16.6 times less risky than Panther Metals. It trades about 0.02 of its potential returns per unit of risk. Panther Metals PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  12,250  in Panther Metals PLC on October 7, 2024 and sell it today you would lose (3,000) from holding Panther Metals PLC or give up 24.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.2%
Values	Daily Returns

Made Tech Group  vs.  Panther Metals PLC

Made Tech Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Made Tech Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Made Tech unveiled solid returns over the last few months and may actually be approaching a breakup point.

Panther Metals PLC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Panther Metals PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Panther Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Made Tech and Panther Metals

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

The idea behind Made Tech Group and Panther Metals 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.