Correlation Between Polymetals Resources and IShares Global

Can any of the company-specific risk be diversified away by investing in both Polymetals Resources and IShares Global 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 Polymetals Resources and IShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Polymetals Resources and iShares Global Healthcare, you can compare the effects of market volatilities on Polymetals Resources and IShares Global 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 Polymetals Resources with a short position of IShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polymetals Resources and IShares Global.

Diversification Opportunities for Polymetals Resources and IShares Global

0.35

Correlation Coefficient

Polymetals Resources  IShares Global

Weak diversification

The 3 months correlation between Polymetals and IShares is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Polymetals Resources and iShares Global Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Healthcare and Polymetals Resources 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 Polymetals Resources are associated (or correlated) with IShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Healthcare has no effect on the direction of Polymetals Resources i.e., Polymetals Resources and IShares Global go up and down completely randomly.

Pair Corralation between Polymetals Resources and IShares Global

Assuming the 90 days trading horizon Polymetals Resources is expected to generate 7.97 times more return on investment than IShares Global. However, Polymetals Resources is 7.97 times more volatile than iShares Global Healthcare. It trades about 0.18 of its potential returns per unit of risk. iShares Global Healthcare is currently generating about -0.01 per unit of risk. If you would invest  30.00  in Polymetals Resources on November 20, 2024 and sell it today you would earn a total of  49.00  from holding Polymetals Resources or generate 163.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.03%
Values	Daily Returns

Polymetals Resources  vs.  iShares Global Healthcare

Polymetals Resources

Risk-Adjusted Performance

Insignificant

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

iShares Global Healthcare

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global Healthcare are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking indicators, IShares Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Polymetals Resources and IShares Global

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

The idea behind Polymetals Resources and iShares Global Healthcare 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.