Correlation Between Carlin Gold and Mundoro Capital

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

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

Diversification Opportunities for Carlin Gold and Mundoro Capital

0.62

Correlation Coefficient

Carlin Gold  Mundoro Capital

Poor diversification

The 3 months correlation between Carlin and Mundoro is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Carlin Gold and Mundoro Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mundoro Capital and Carlin Gold 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 Carlin Gold are associated (or correlated) with Mundoro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mundoro Capital has no effect on the direction of Carlin Gold i.e., Carlin Gold and Mundoro Capital go up and down completely randomly.

Pair Corralation between Carlin Gold and Mundoro Capital

Assuming the 90 days horizon Carlin Gold is expected to under-perform the Mundoro Capital. But the stock apears to be less risky and, when comparing its historical volatility, Carlin Gold is 1.6 times less risky than Mundoro Capital. The stock trades about -0.23 of its potential returns per unit of risk. The Mundoro Capital is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Mundoro Capital on October 24, 2024 and sell it today you would lose (1.00) from holding Mundoro Capital or give up 5.56% of portfolio value over 90 days.

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

Carlin Gold  vs.  Mundoro Capital

Carlin Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlin Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Mundoro Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mundoro Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Carlin Gold and Mundoro Capital

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

The idea behind Carlin Gold and Mundoro Capital 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.