Correlation Between Cantex Mine and Mundoro Capital

Can any of the company-specific risk be diversified away by investing in both Cantex Mine 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 Cantex Mine and Mundoro Capital 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 Mundoro Capital, you can compare the effects of market volatilities on Cantex Mine 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 Cantex Mine with a short position of Mundoro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantex Mine and Mundoro Capital.

Diversification Opportunities for Cantex Mine and Mundoro Capital

0.07

Correlation Coefficient

Cantex Mine  Mundoro Capital

Significant diversification

The 3 months correlation between Cantex and Mundoro is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and Mundoro Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mundoro Capital 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 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 Cantex Mine i.e., Cantex Mine and Mundoro Capital go up and down completely randomly.

Pair Corralation between Cantex Mine and Mundoro Capital

Assuming the 90 days horizon Cantex Mine Development is expected to generate 2.18 times more return on investment than Mundoro Capital. However, Cantex Mine is 2.18 times more volatile than Mundoro Capital. It trades about 0.17 of its potential returns per unit of risk. Mundoro Capital is currently generating about 0.12 per unit of risk. If you would invest  7.23  in Cantex Mine Development on December 30, 2024 and sell it today you would earn a total of  9.77  from holding Cantex Mine Development or generate 135.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Cantex Mine Development  vs.  Mundoro Capital

Cantex Mine Development

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cantex Mine Development are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Cantex Mine reported solid returns over the last few months and may actually be approaching a breakup point.

Mundoro Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mundoro Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Mundoro Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cantex Mine and Mundoro Capital

The main advantage of trading using opposite Cantex Mine and Mundoro Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantex Mine 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 Cantex Mine Development 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.