Correlation Between Panther Metals and Made Tech

Can any of the company-specific risk be diversified away by investing in both Panther Metals and Made Tech 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 Made Tech 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 Made Tech Group, you can compare the effects of market volatilities on Panther Metals and Made Tech 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 Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panther Metals and Made Tech.

Diversification Opportunities for Panther Metals and Made Tech

0.31

Correlation Coefficient

Panther Metals  Made Tech

Weak diversification

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

Pair Corralation between Panther Metals and Made Tech

Assuming the 90 days trading horizon Panther Metals PLC is expected to generate 16.6 times more return on investment than Made Tech. However, Panther Metals is 16.6 times more volatile than Made Tech Group. It trades about 0.07 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.02 per unit of risk. 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

Panther Metals PLC  vs.  Made Tech Group

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.

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.

Pair Trading with Panther Metals and Made Tech

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

The idea behind Panther Metals PLC and Made Tech Group 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.