Correlation Between PM Capital and Metro Mining
Can any of the company-specific risk be diversified away by investing in both PM Capital and Metro Mining 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 PM Capital and Metro Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PM Capital Global and Metro Mining, you can compare the effects of market volatilities on PM Capital and Metro Mining 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 PM Capital with a short position of Metro Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of PM Capital and Metro Mining.
Diversification Opportunities for PM Capital and Metro Mining
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between PGF and Metro is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding PM Capital Global and Metro Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Mining and PM Capital 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 PM Capital Global are associated (or correlated) with Metro Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Mining has no effect on the direction of PM Capital i.e., PM Capital and Metro Mining go up and down completely randomly.
Pair Corralation between PM Capital and Metro Mining
Assuming the 90 days trading horizon PM Capital Global is expected to generate 0.48 times more return on investment than Metro Mining. However, PM Capital Global is 2.07 times less risky than Metro Mining. It trades about 0.09 of its potential returns per unit of risk. Metro Mining is currently generating about -0.09 per unit of risk. If you would invest 230.00 in PM Capital Global on December 3, 2024 and sell it today you would earn a total of 17.00 from holding PM Capital Global or generate 7.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PM Capital Global vs. Metro Mining
Performance |
Timeline |
PM Capital Global |
Metro Mining |
PM Capital and Metro Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PM Capital and Metro Mining
The main advantage of trading using opposite PM Capital and Metro Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PM Capital position performs unexpectedly, Metro Mining 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 Metro Mining will offset losses from the drop in Metro Mining's long position.PM Capital vs. Sports Entertainment Group | PM Capital vs. Carawine Resources Limited | PM Capital vs. Charter Hall Retail | PM Capital vs. Cleanaway Waste Management |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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