Correlation Between Panther Metals and NewRiver REIT

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

Diversification Opportunities for Panther Metals and NewRiver REIT

-0.75

Correlation Coefficient

Panther Metals  NewRiver REIT

Pay attention - limited upside

The 3 months correlation between Panther and NewRiver is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals PLC and NewRiver REIT plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewRiver REIT plc 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 NewRiver REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewRiver REIT plc has no effect on the direction of Panther Metals i.e., Panther Metals and NewRiver REIT go up and down completely randomly.

Pair Corralation between Panther Metals and NewRiver REIT

Assuming the 90 days trading horizon Panther Metals PLC is expected to generate 3.6 times more return on investment than NewRiver REIT. However, Panther Metals is 3.6 times more volatile than NewRiver REIT plc. It trades about 0.03 of its potential returns per unit of risk. NewRiver REIT plc is currently generating about -0.03 per unit of risk. If you would invest  11,250  in Panther Metals PLC on September 3, 2024 and sell it today you would earn a total of  250.00  from holding Panther Metals PLC or generate 2.22% return on investment over 90 days.

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

Panther Metals PLC  vs.  NewRiver REIT plc

Panther Metals PLC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Panther Metals PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Panther Metals may actually be approaching a critical reversion point that can send shares even higher in January 2025.

NewRiver REIT plc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Panther Metals and NewRiver REIT

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

The idea behind Panther Metals PLC and NewRiver REIT 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.