Correlation Between Afine Investments and MC Mining
Can any of the company-specific risk be diversified away by investing in both Afine Investments and MC 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 Afine Investments and MC Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Afine Investments and MC Mining, you can compare the effects of market volatilities on Afine Investments and MC 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 Afine Investments with a short position of MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Afine Investments and MC Mining.
Diversification Opportunities for Afine Investments and MC Mining
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Afine and MCZ is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Afine Investments and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and Afine Investments 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 Afine Investments are associated (or correlated) with MC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Mining has no effect on the direction of Afine Investments i.e., Afine Investments and MC Mining go up and down completely randomly.
Pair Corralation between Afine Investments and MC Mining
Assuming the 90 days trading horizon Afine Investments is expected to generate 47.16 times more return on investment than MC Mining. However, Afine Investments is 47.16 times more volatile than MC Mining. It trades about 0.16 of its potential returns per unit of risk. MC Mining is currently generating about 0.08 per unit of risk. If you would invest 382.00 in Afine Investments on September 23, 2024 and sell it today you would earn a total of 39,718 from holding Afine Investments or generate 10397.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Afine Investments vs. MC Mining
Performance |
Timeline |
Afine Investments |
MC Mining |
Afine Investments and MC Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Afine Investments and MC Mining
The main advantage of trading using opposite Afine Investments and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Afine Investments position performs unexpectedly, MC 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 MC Mining will offset losses from the drop in MC Mining's long position.Afine Investments vs. Schroder European Real | Afine Investments vs. Aveng | Afine Investments vs. Thungela Resources Limited | Afine Investments vs. Prosus NV |
MC Mining vs. Exxaro Resources | MC Mining vs. Thungela Resources Limited | MC Mining vs. Afine Investments | MC Mining vs. Capitec Bank Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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