Correlation Between Aftermath Silver and Financial

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

By analyzing existing cross correlation between Aftermath Silver and Financial 15 Split, you can compare the effects of market volatilities on Aftermath Silver and Financial 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 Aftermath Silver with a short position of Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aftermath Silver and Financial.

Diversification Opportunities for Aftermath Silver and Financial

0.7

Correlation Coefficient

Aftermath Silver  Financial

Poor diversification

The 3 months correlation between Aftermath and Financial is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aftermath Silver and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split and Aftermath Silver 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 Aftermath Silver are associated (or correlated) with Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of Aftermath Silver i.e., Aftermath Silver and Financial go up and down completely randomly.

Pair Corralation between Aftermath Silver and Financial

Assuming the 90 days horizon Aftermath Silver is expected to under-perform the Financial. In addition to that, Aftermath Silver is 22.42 times more volatile than Financial 15 Split. It trades about -0.13 of its total potential returns per unit of risk. Financial 15 Split is currently generating about -0.08 per unit of volatility. If you would invest  1,034  in Financial 15 Split on March 22, 2024 and sell it today you would lose (4.00) from holding Financial 15 Split or give up 0.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aftermath Silver  vs.  Financial 15 Split

Aftermath Silver

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aftermath Silver are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Aftermath Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Financial 15 Split

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Financial 15 Split are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aftermath Silver and Financial

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

The idea behind Aftermath Silver and Financial 15 Split 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.