Correlation Between Neometals and IShares Physical

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

By analyzing existing cross correlation between Neometals and iShares Physical Silver, you can compare the effects of market volatilities on Neometals and IShares Physical 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 Neometals with a short position of IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neometals and IShares Physical.

Diversification Opportunities for Neometals and IShares Physical

0.22

Correlation Coefficient

Neometals  IShares Physical

Modest diversification

The 3 months correlation between Neometals and IShares is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Neometals and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver and Neometals 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 Neometals are associated (or correlated) with IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of Neometals i.e., Neometals and IShares Physical go up and down completely randomly.

Pair Corralation between Neometals and IShares Physical

Assuming the 90 days trading horizon Neometals is expected to generate 2.36 times more return on investment than IShares Physical. However, Neometals is 2.36 times more volatile than iShares Physical Silver. It trades about 0.09 of its potential returns per unit of risk. iShares Physical Silver is currently generating about 0.07 per unit of risk. If you would invest  400.00  in Neometals on September 12, 2024 and sell it today you would earn a total of  75.00  from holding Neometals or generate 18.75% return on investment over 90 days.

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

Neometals  vs.  iShares Physical Silver

Neometals

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Neometals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Neometals exhibited solid returns over the last few months and may actually be approaching a breakup point.

iShares Physical Silver

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Physical Silver are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, IShares Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Neometals and IShares Physical

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

The idea behind Neometals and iShares Physical Silver 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.