Correlation Between Compania and Polymetal International

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

By analyzing existing cross correlation between Compania de Minas and Polymetal International PLC, you can compare the effects of market volatilities on Compania and Polymetal International 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 Compania with a short position of Polymetal International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania and Polymetal International.

Diversification Opportunities for Compania and Polymetal International

0.0

Correlation Coefficient

Compania  Polymetal International

Pay attention - limited upside

The 3 months correlation between Compania and Polymetal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compania de Minas and Polymetal International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polymetal International and Compania 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 Compania de Minas are associated (or correlated) with Polymetal International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polymetal International has no effect on the direction of Compania i.e., Compania and Polymetal International go up and down completely randomly.

Pair Corralation between Compania and Polymetal International

If you would invest  309.00  in Polymetal International PLC on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Polymetal International PLC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Compania de Minas  vs.  Polymetal International PLC

Compania de Minas

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compania de Minas are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Compania is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Polymetal International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Compania and Polymetal International

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

The idea behind Compania de Minas and Polymetal International PLC 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.