Correlation Between MONGOLIAN MINING and Ecora Resources

Can any of the company-specific risk be diversified away by investing in both MONGOLIAN MINING and Ecora Resources 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 Ecora Resources 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 Ecora Resources PLC, you can compare the effects of market volatilities on MONGOLIAN MINING and Ecora Resources 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 Ecora Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of MONGOLIAN MINING and Ecora Resources.

Diversification Opportunities for MONGOLIAN MINING and Ecora Resources

-0.29

Correlation Coefficient

MONGOLIAN MINING  Ecora Resources

Very good diversification

The 3 months correlation between MONGOLIAN and Ecora is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding MONGOLIAN MINING CRPREGS and Ecora Resources PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecora Resources PLC 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 Ecora Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecora Resources PLC has no effect on the direction of MONGOLIAN MINING i.e., MONGOLIAN MINING and Ecora Resources go up and down completely randomly.

Pair Corralation between MONGOLIAN MINING and Ecora Resources

Assuming the 90 days trading horizon MONGOLIAN MINING CRPREGS is expected to under-perform the Ecora Resources. In addition to that, MONGOLIAN MINING is 1.04 times more volatile than Ecora Resources PLC. It trades about -0.31 of its total potential returns per unit of risk. Ecora Resources PLC is currently generating about -0.05 per unit of volatility. If you would invest  76.00  in Ecora Resources PLC on September 23, 2024 and sell it today you would lose (2.00) from holding Ecora Resources PLC or give up 2.63% of portfolio value over 90 days.

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

MONGOLIAN MINING CRPREGS  vs.  Ecora Resources PLC

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.

Ecora Resources PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecora Resources PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with MONGOLIAN MINING and Ecora Resources

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

The idea behind MONGOLIAN MINING CRPREGS and Ecora Resources 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.