Correlation Between Roth CH and Metals Acquisition

Can any of the company-specific risk be diversified away by investing in both Roth CH and Metals Acquisition 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 Roth CH and Metals Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Roth CH Acquisition and Metals Acquisition Limited, you can compare the effects of market volatilities on Roth CH and Metals Acquisition 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 Roth CH with a short position of Metals Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roth CH and Metals Acquisition.

Diversification Opportunities for Roth CH and Metals Acquisition

0.18

Correlation Coefficient

Roth CH  Metals Acquisition

Average diversification

The 3 months correlation between Roth and Metals is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Roth CH Acquisition and Metals Acquisition Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Acquisition and Roth CH 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 Roth CH Acquisition are associated (or correlated) with Metals Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Acquisition has no effect on the direction of Roth CH i.e., Roth CH and Metals Acquisition go up and down completely randomly.

Pair Corralation between Roth CH and Metals Acquisition

If you would invest  1,159  in Metals Acquisition Limited on September 17, 2024 and sell it today you would earn a total of  61.00  from holding Metals Acquisition Limited or generate 5.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Roth CH Acquisition  vs.  Metals Acquisition Limited

Roth CH Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roth CH Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Roth CH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Metals Acquisition

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Metals Acquisition Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Metals Acquisition is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Roth CH and Metals Acquisition

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

The idea behind Roth CH Acquisition and Metals Acquisition Limited 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.