Correlation Between Cantex Mine and Orosur Mining

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

Diversification Opportunities for Cantex Mine and Orosur Mining

0.42

Correlation Coefficient

Cantex Mine  Orosur Mining

Very weak diversification

The 3 months correlation between Cantex and Orosur is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and Orosur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orosur Mining 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 Orosur Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orosur Mining has no effect on the direction of Cantex Mine i.e., Cantex Mine and Orosur Mining go up and down completely randomly.

Pair Corralation between Cantex Mine and Orosur Mining

Assuming the 90 days horizon Cantex Mine Development is expected to generate 1.7 times more return on investment than Orosur Mining. However, Cantex Mine is 1.7 times more volatile than Orosur Mining. It trades about 0.01 of its potential returns per unit of risk. Orosur Mining is currently generating about -0.29 per unit of risk. If you would invest  8.00  in Cantex Mine Development on October 24, 2024 and sell it today you would lose (0.13) from holding Cantex Mine Development or give up 1.62% of portfolio value over 90 days.

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

Cantex Mine Development  vs.  Orosur Mining

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 nearly stable fundamental indicators, Cantex Mine is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Orosur Mining

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orosur Mining are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Orosur Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cantex Mine and Orosur Mining

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

The idea behind Cantex Mine Development and Orosur 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.