Correlation Between Squirrel Media and All Iron

Can any of the company-specific risk be diversified away by investing in both Squirrel Media and All Iron 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 Squirrel Media and All Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Squirrel Media SA and All Iron Re, you can compare the effects of market volatilities on Squirrel Media and All Iron 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 Squirrel Media with a short position of All Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Squirrel Media and All Iron.

Diversification Opportunities for Squirrel Media and All Iron

-0.05

Correlation Coefficient

Squirrel Media  All Iron

Good diversification

The 3 months correlation between Squirrel and All is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Squirrel Media SA and All Iron Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on All Iron Re and Squirrel Media 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 Squirrel Media SA are associated (or correlated) with All Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of All Iron Re has no effect on the direction of Squirrel Media i.e., Squirrel Media and All Iron go up and down completely randomly.

Pair Corralation between Squirrel Media and All Iron

Assuming the 90 days trading horizon Squirrel Media SA is expected to generate 15.38 times more return on investment than All Iron. However, Squirrel Media is 15.38 times more volatile than All Iron Re. It trades about 0.26 of its potential returns per unit of risk. All Iron Re is currently generating about 0.22 per unit of risk. If you would invest  124.00  in Squirrel Media SA on October 26, 2024 and sell it today you would earn a total of  19.00  from holding Squirrel Media SA or generate 15.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Squirrel Media SA  vs.  All Iron Re

Squirrel Media SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Squirrel Media SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Squirrel Media is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

All Iron Re

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in All Iron Re are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, All Iron is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Squirrel Media and All Iron

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

The idea behind Squirrel Media SA and All Iron Re 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.