Correlation Between Plata Latina and Pace Metals

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Can any of the company-specific risk be diversified away by investing in both Plata Latina and Pace Metals 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 Plata Latina and Pace Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plata Latina Minerals and Pace Metals, you can compare the effects of market volatilities on Plata Latina and Pace Metals 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 Plata Latina with a short position of Pace Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plata Latina and Pace Metals.

Diversification Opportunities for Plata Latina and Pace Metals

PlataPaceDiversified AwayPlataPaceDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Plata and Pace is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Plata Latina Minerals and Pace Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Metals and Plata Latina 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 Plata Latina Minerals are associated (or correlated) with Pace Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Metals has no effect on the direction of Plata Latina i.e., Plata Latina and Pace Metals go up and down completely randomly.

Pair Corralation between Plata Latina and Pace Metals

If you would invest  1.00  in Plata Latina Minerals on November 24, 2024 and sell it today you would earn a total of  4.00  from holding Plata Latina Minerals or generate 400.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Plata Latina Minerals  vs.  Pace Metals

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50-40-30-20-10
JavaScript chart by amCharts 3.21.15PLA PACE
       Timeline  
Plata Latina Minerals 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Plata Latina Minerals are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Plata Latina showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.010.0150.020.0250.030.0350.040.0450.05
Pace Metals 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Pace Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Pace Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.160.165

Plata Latina and Pace Metals Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-99.2-74.29-49.39-24.490.4526.7753.5480.31107.08 0.000050.000100.000150.000200.000250.000300.00035
JavaScript chart by amCharts 3.21.15PLA PACE
       Returns  

Pair Trading with Plata Latina and Pace Metals

The main advantage of trading using opposite Plata Latina and Pace Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plata Latina position performs unexpectedly, Pace Metals 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 Pace Metals will offset losses from the drop in Pace Metals' long position.
The idea behind Plata Latina Minerals and Pace Metals 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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