Correlation Between Cardano and Compania Minera

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

By analyzing existing cross correlation between Cardano and Compania Minera Poderosa, you can compare the effects of market volatilities on Cardano and Compania Minera 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 Cardano with a short position of Compania Minera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardano and Compania Minera.

Diversification Opportunities for Cardano and Compania Minera

-0.17

Correlation Coefficient

Cardano  Compania Minera

Good diversification

The 3 months correlation between Cardano and Compania is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Cardano and Compania Minera Poderosa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Minera Poderosa and Cardano 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 Cardano are associated (or correlated) with Compania Minera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Minera Poderosa has no effect on the direction of Cardano i.e., Cardano and Compania Minera go up and down completely randomly.

Pair Corralation between Cardano and Compania Minera

Assuming the 90 days trading horizon Cardano is expected to under-perform the Compania Minera. In addition to that, Cardano is 4.67 times more volatile than Compania Minera Poderosa. It trades about -0.12 of its total potential returns per unit of risk. Compania Minera Poderosa is currently generating about -0.11 per unit of volatility. If you would invest  825.00  in Compania Minera Poderosa on October 12, 2024 and sell it today you would lose (25.00) from holding Compania Minera Poderosa or give up 3.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Cardano  vs.  Compania Minera Poderosa

Cardano

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cardano are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Cardano exhibited solid returns over the last few months and may actually be approaching a breakup point.

Compania Minera Poderosa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compania Minera Poderosa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Compania Minera is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cardano and Compania Minera

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

The idea behind Cardano and Compania Minera Poderosa 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.