Correlation Between Cantex Mine and Mason Graphite

Can any of the company-specific risk be diversified away by investing in both Cantex Mine and Mason Graphite 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 Cantex Mine and Mason Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cantex Mine Development and Mason Graphite, you can compare the effects of market volatilities on Cantex Mine and Mason Graphite 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 Cantex Mine with a short position of Mason Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantex Mine and Mason Graphite.

Diversification Opportunities for Cantex Mine and Mason Graphite

0.04

Correlation Coefficient

Cantex Mine  Mason Graphite

Significant diversification

The 3 months correlation between Cantex and Mason is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and Mason Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mason Graphite and Cantex Mine 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 Cantex Mine Development are associated (or correlated) with Mason Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mason Graphite has no effect on the direction of Cantex Mine i.e., Cantex Mine and Mason Graphite go up and down completely randomly.

Pair Corralation between Cantex Mine and Mason Graphite

Assuming the 90 days horizon Cantex Mine Development is expected to under-perform the Mason Graphite. But the otc stock apears to be less risky and, when comparing its historical volatility, Cantex Mine Development is 1.84 times less risky than Mason Graphite. The otc stock trades about -0.22 of its potential returns per unit of risk. The Mason Graphite is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  5.50  in Mason Graphite on October 25, 2024 and sell it today you would lose (0.70) from holding Mason Graphite or give up 12.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

Cantex Mine Development  vs.  Mason Graphite

Cantex Mine Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cantex Mine Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Mason Graphite

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with Cantex Mine and Mason Graphite

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

The idea behind Cantex Mine Development and Mason Graphite 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.