Correlation Between Industrias Penoles and MAGNUM MINING
Can any of the company-specific risk be diversified away by investing in both Industrias Penoles and MAGNUM MINING 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 Industrias Penoles and MAGNUM MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrias Penoles Sab and MAGNUM MINING EXP, you can compare the effects of market volatilities on Industrias Penoles and MAGNUM MINING 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 Industrias Penoles with a short position of MAGNUM MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrias Penoles and MAGNUM MINING.
Diversification Opportunities for Industrias Penoles and MAGNUM MINING
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Industrias and MAGNUM is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Industrias Penoles Sab and MAGNUM MINING EXP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNUM MINING EXP and Industrias Penoles 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 Industrias Penoles Sab are associated (or correlated) with MAGNUM MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNUM MINING EXP has no effect on the direction of Industrias Penoles i.e., Industrias Penoles and MAGNUM MINING go up and down completely randomly.
Pair Corralation between Industrias Penoles and MAGNUM MINING
Assuming the 90 days horizon Industrias Penoles Sab is expected to generate 1.06 times more return on investment than MAGNUM MINING. However, Industrias Penoles is 1.06 times more volatile than MAGNUM MINING EXP. It trades about 0.14 of its potential returns per unit of risk. MAGNUM MINING EXP is currently generating about -0.13 per unit of risk. If you would invest 1,260 in Industrias Penoles Sab on December 30, 2024 and sell it today you would earn a total of 390.00 from holding Industrias Penoles Sab or generate 30.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Industrias Penoles Sab vs. MAGNUM MINING EXP
Performance |
Timeline |
Industrias Penoles Sab |
MAGNUM MINING EXP |
Industrias Penoles and MAGNUM MINING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Industrias Penoles and MAGNUM MINING
The main advantage of trading using opposite Industrias Penoles and MAGNUM MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrias Penoles position performs unexpectedly, MAGNUM MINING 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 MAGNUM MINING will offset losses from the drop in MAGNUM MINING's long position.Industrias Penoles vs. Cleanaway Waste Management | Industrias Penoles vs. CENTURIA OFFICE REIT | Industrias Penoles vs. Chesapeake Utilities | Industrias Penoles vs. CITY OFFICE REIT |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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