Correlation Between Adventus Mining and Mineral Res

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

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

Diversification Opportunities for Adventus Mining and Mineral Res

0.29

Correlation Coefficient

Adventus Mining  Mineral Res

Modest diversification

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

Pair Corralation between Adventus Mining and Mineral Res

Assuming the 90 days horizon Adventus Mining is expected to generate 1.36 times more return on investment than Mineral Res. However, Adventus Mining is 1.36 times more volatile than Mineral Res. It trades about 0.08 of its potential returns per unit of risk. Mineral Res is currently generating about -0.06 per unit of risk. If you would invest  21.00  in Adventus Mining on October 7, 2024 and sell it today you would earn a total of  11.00  from holding Adventus Mining or generate 52.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	58.06%
Values	Daily Returns

Adventus Mining  vs.  Mineral Res

Adventus Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adventus Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Adventus Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Mineral Res

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mineral Res has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Adventus Mining and Mineral Res

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

The idea behind Adventus Mining and Mineral Res 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.