Correlation Between Metals Exploration and Fulcrum Metals

Can any of the company-specific risk be diversified away by investing in both Metals Exploration and Fulcrum 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 Metals Exploration and Fulcrum Metals 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 Fulcrum Metals PLC, you can compare the effects of market volatilities on Metals Exploration and Fulcrum 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 Metals Exploration with a short position of Fulcrum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Fulcrum Metals.

Diversification Opportunities for Metals Exploration and Fulcrum Metals

-0.33

Correlation Coefficient

Metals Exploration  Fulcrum Metals

Very good diversification

The 3 months correlation between Metals and Fulcrum is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals 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 Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of Metals Exploration i.e., Metals Exploration and Fulcrum Metals go up and down completely randomly.

Pair Corralation between Metals Exploration and Fulcrum Metals

Assuming the 90 days trading horizon Metals Exploration Plc is expected to under-perform the Fulcrum Metals. In addition to that, Metals Exploration is 4.16 times more volatile than Fulcrum Metals PLC. It trades about -0.12 of its total potential returns per unit of risk. Fulcrum Metals PLC is currently generating about 0.21 per unit of volatility. If you would invest  750.00  in Fulcrum Metals PLC on September 26, 2024 and sell it today you would earn a total of  25.00  from holding Fulcrum Metals PLC or generate 3.33% 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.  Fulcrum Metals PLC

Metals Exploration Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metals Exploration Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Metals Exploration is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Fulcrum Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fulcrum Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Metals Exploration and Fulcrum Metals

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

The idea behind Metals Exploration Plc and Fulcrum 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.