Correlation Between URU Metals and Iron Mountain

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

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

Diversification Opportunities for URU Metals and Iron Mountain

-0.4

Correlation Coefficient

URU Metals  Iron Mountain

Very good diversification

The 3 months correlation between URU and Iron is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding URU Metals and Iron Mountain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain and URU Metals 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 URU Metals are associated (or correlated) with Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of URU Metals i.e., URU Metals and Iron Mountain go up and down completely randomly.

Pair Corralation between URU Metals and Iron Mountain

Assuming the 90 days trading horizon URU Metals is expected to generate 4.47 times more return on investment than Iron Mountain. However, URU Metals is 4.47 times more volatile than Iron Mountain. It trades about 0.03 of its potential returns per unit of risk. Iron Mountain is currently generating about 0.11 per unit of risk. If you would invest  15,000  in URU Metals on September 23, 2024 and sell it today you would earn a total of  1,000.00  from holding URU Metals or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.57%
Values	Daily Returns

URU Metals  vs.  Iron Mountain

URU Metals

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in URU Metals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, URU Metals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Iron Mountain

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iron Mountain has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with URU Metals and Iron Mountain

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

The idea behind URU Metals and Iron Mountain 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.