Correlation Between Panther Metals and Associated British

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

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

Diversification Opportunities for Panther Metals and Associated British

-0.26

Correlation Coefficient

Panther Metals  Associated British

Very good diversification

The 3 months correlation between Panther and Associated is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals PLC and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods and Panther Metals 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 Panther Metals PLC are associated (or correlated) with Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of Panther Metals i.e., Panther Metals and Associated British go up and down completely randomly.

Pair Corralation between Panther Metals and Associated British

Assuming the 90 days trading horizon Panther Metals PLC is expected to generate 59.03 times more return on investment than Associated British. However, Panther Metals is 59.03 times more volatile than Associated British Foods. It trades about 0.07 of its potential returns per unit of risk. Associated British Foods is currently generating about 0.04 per unit of risk. If you would invest  12,125  in Panther Metals PLC on September 29, 2024 and sell it today you would lose (3,875) from holding Panther Metals PLC or give up 31.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Panther Metals PLC  vs.  Associated British Foods

Panther Metals PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Panther Metals PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Panther Metals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Associated British Foods

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Panther Metals and Associated British

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

The idea behind Panther Metals PLC and Associated British Foods 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.