Correlation Between Alfa Financial and MAGNUM MINING

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

By analyzing existing cross correlation between Alfa Financial Software and MAGNUM MINING EXP, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of MAGNUM MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and MAGNUM MINING.

Diversification Opportunities for Alfa Financial and MAGNUM MINING

0.0

Correlation Coefficient

Alfa Financial  MAGNUM MINING

Pay attention - limited upside

The 3 months correlation between Alfa and MAGNUM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software 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 Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and MAGNUM MINING go up and down completely randomly.

Pair Corralation between Alfa Financial and MAGNUM MINING

If you would invest  161.00  in Alfa Financial Software on September 14, 2024 and sell it today you would earn a total of  111.00  from holding Alfa Financial Software or generate 68.94% return on investment over 90 days.

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

Alfa Financial Software  vs.  MAGNUM MINING EXP

Alfa Financial Software

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alfa Financial Software are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alfa Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

MAGNUM MINING EXP

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Alfa Financial and MAGNUM MINING

The main advantage of trading using opposite Alfa Financial and MAGNUM MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.

The idea behind Alfa Financial Software and MAGNUM MINING EXP 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 Transaction History module to view history of all your transactions and understand their impact on performance.