Correlation Between Brait SE and Mantengu Mining

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

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

Diversification Opportunities for Brait SE and Mantengu Mining

-0.38

Correlation Coefficient

Brait SE  Mantengu Mining

Very good diversification

The 3 months correlation between Brait and Mantengu is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Brait SE and Mantengu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mantengu Mining and Brait SE 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 Brait SE are associated (or correlated) with Mantengu Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mantengu Mining has no effect on the direction of Brait SE i.e., Brait SE and Mantengu Mining go up and down completely randomly.

Pair Corralation between Brait SE and Mantengu Mining

Assuming the 90 days trading horizon Brait SE is expected to under-perform the Mantengu Mining. But the stock apears to be less risky and, when comparing its historical volatility, Brait SE is 4.3 times less risky than Mantengu Mining. The stock trades about -0.03 of its potential returns per unit of risk. The Mantengu Mining is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  100,000  in Mantengu Mining on September 24, 2024 and sell it today you would lose (93,000) from holding Mantengu Mining or give up 93.0% of portfolio value over 90 days.

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

Brait SE  vs.  Mantengu Mining

Brait SE

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brait SE are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Brait SE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mantengu Mining

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Brait SE and Mantengu Mining

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

The idea behind Brait SE and Mantengu Mining 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.