Correlation Between Metals Exploration and Celebrus Technologies

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

By analyzing existing cross correlation between Metals Exploration Plc and Celebrus Technologies plc, you can compare the effects of market volatilities on Metals Exploration and Celebrus Technologies 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 Metals Exploration with a short position of Celebrus Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Celebrus Technologies.

Diversification Opportunities for Metals Exploration and Celebrus Technologies

-0.28

Correlation Coefficient

Metals Exploration  Celebrus Technologies

Very good diversification

The 3 months correlation between Metals and Celebrus is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Celebrus Technologies plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celebrus Technologies plc and Metals Exploration 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 Metals Exploration Plc are associated (or correlated) with Celebrus Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celebrus Technologies plc has no effect on the direction of Metals Exploration i.e., Metals Exploration and Celebrus Technologies go up and down completely randomly.

Pair Corralation between Metals Exploration and Celebrus Technologies

Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 1.35 times more return on investment than Celebrus Technologies. However, Metals Exploration is 1.35 times more volatile than Celebrus Technologies plc. It trades about 0.11 of its potential returns per unit of risk. Celebrus Technologies plc is currently generating about -0.02 per unit of risk. If you would invest  485.00  in Metals Exploration Plc on October 7, 2024 and sell it today you would earn a total of  105.00  from holding Metals Exploration Plc or generate 21.65% return on investment over 90 days.

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

Metals Exploration Plc  vs.  Celebrus Technologies plc

Metals Exploration Plc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Metals Exploration Plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Metals Exploration exhibited solid returns over the last few months and may actually be approaching a breakup point.

Celebrus Technologies plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Celebrus Technologies plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Celebrus Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Metals Exploration and Celebrus Technologies

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

The idea behind Metals Exploration Plc and Celebrus Technologies 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.