Correlation Between MONGOLIAN MINING and AJ LUCAS

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

By analyzing existing cross correlation between MONGOLIAN MINING CRPREGS and AJ LUCAS GROUP, you can compare the effects of market volatilities on MONGOLIAN MINING and AJ LUCAS 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 MONGOLIAN MINING with a short position of AJ LUCAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MONGOLIAN MINING and AJ LUCAS.

Diversification Opportunities for MONGOLIAN MINING and AJ LUCAS

0.44

Correlation Coefficient

MONGOLIAN MINING  AJ LUCAS

Very weak diversification

The 3 months correlation between MONGOLIAN and FW9 is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding MONGOLIAN MINING CRPREGS and AJ LUCAS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ LUCAS GROUP and MONGOLIAN MINING 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 MONGOLIAN MINING CRPREGS are associated (or correlated) with AJ LUCAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ LUCAS GROUP has no effect on the direction of MONGOLIAN MINING i.e., MONGOLIAN MINING and AJ LUCAS go up and down completely randomly.

Pair Corralation between MONGOLIAN MINING and AJ LUCAS

Assuming the 90 days trading horizon MONGOLIAN MINING CRPREGS is expected to under-perform the AJ LUCAS. But the stock apears to be less risky and, when comparing its historical volatility, MONGOLIAN MINING CRPREGS is 16.27 times less risky than AJ LUCAS. The stock trades about -0.31 of its potential returns per unit of risk. The AJ LUCAS GROUP is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.05  in AJ LUCAS GROUP on September 23, 2024 and sell it today you would earn a total of  0.00  from holding AJ LUCAS GROUP or generate 0.0% return on investment over 90 days.

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

MONGOLIAN MINING CRPREGS  vs.  AJ LUCAS GROUP

MONGOLIAN MINING CRPREGS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MONGOLIAN MINING CRPREGS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MONGOLIAN MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

AJ LUCAS GROUP

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AJ LUCAS GROUP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AJ LUCAS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MONGOLIAN MINING and AJ LUCAS

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

The idea behind MONGOLIAN MINING CRPREGS and AJ LUCAS GROUP 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.