Correlation Between Adriatic Metals and Vistry Group

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

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

Diversification Opportunities for Adriatic Metals and Vistry Group

-0.06

Correlation Coefficient

Adriatic Metals  Vistry Group

Good diversification

The 3 months correlation between Adriatic and Vistry is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals and Vistry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vistry Group PLC and Adriatic 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 Adriatic Metals are associated (or correlated) with Vistry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vistry Group PLC has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and Vistry Group go up and down completely randomly.

Pair Corralation between Adriatic Metals and Vistry Group

Assuming the 90 days trading horizon Adriatic Metals is expected to generate 1.51 times more return on investment than Vistry Group. However, Adriatic Metals is 1.51 times more volatile than Vistry Group PLC. It trades about 0.16 of its potential returns per unit of risk. Vistry Group PLC is currently generating about 0.01 per unit of risk. If you would invest  20,350  in Adriatic Metals on April 24, 2025 and sell it today you would earn a total of  8,450  from holding Adriatic Metals or generate 41.52% return on investment over 90 days.

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

Adriatic Metals  vs.  Vistry Group PLC

Adriatic Metals

Risk-Adjusted Performance

Good

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

Vistry Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vistry Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Vistry Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Adriatic Metals and Vistry Group

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

The idea behind Adriatic Metals and Vistry Group 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.