Correlation Between Balkan Mining and Microequities Asset

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

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

Diversification Opportunities for Balkan Mining and Microequities Asset

0.31

Correlation Coefficient

Balkan Mining  Microequities Asset

Weak diversification

The 3 months correlation between Balkan and Microequities is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Balkan Mining and and Microequities Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microequities Asset and Balkan 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 Balkan Mining and are associated (or correlated) with Microequities Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microequities Asset has no effect on the direction of Balkan Mining i.e., Balkan Mining and Microequities Asset go up and down completely randomly.

Pair Corralation between Balkan Mining and Microequities Asset

Assuming the 90 days trading horizon Balkan Mining and is expected to under-perform the Microequities Asset. In addition to that, Balkan Mining is 1.44 times more volatile than Microequities Asset Management. It trades about -0.07 of its total potential returns per unit of risk. Microequities Asset Management is currently generating about -0.01 per unit of volatility. If you would invest  50.00  in Microequities Asset Management on December 26, 2024 and sell it today you would lose (2.00) from holding Microequities Asset Management or give up 4.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Balkan Mining and  vs.  Microequities Asset Management

Balkan Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Balkan Mining and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Microequities Asset

Risk-Adjusted Performance

Very Weak

Over the last 90 days Microequities Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Microequities Asset is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Balkan Mining and Microequities Asset

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

The idea behind Balkan Mining and and Microequities Asset Management 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.