Correlation Between Monument Mining and ANGLO ASIAN

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

By analyzing existing cross correlation between Monument Mining Limited and ANGLO ASIAN MINING, you can compare the effects of market volatilities on Monument Mining and ANGLO ASIAN 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 Monument Mining with a short position of ANGLO ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and ANGLO ASIAN.

Diversification Opportunities for Monument Mining and ANGLO ASIAN

0.66

Correlation Coefficient

Monument Mining  ANGLO ASIAN

Poor diversification

The 3 months correlation between Monument and ANGLO is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and ANGLO ASIAN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLO ASIAN MINING and Monument 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 Monument Mining Limited are associated (or correlated) with ANGLO ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLO ASIAN MINING has no effect on the direction of Monument Mining i.e., Monument Mining and ANGLO ASIAN go up and down completely randomly.

Pair Corralation between Monument Mining and ANGLO ASIAN

Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 1.91 times more return on investment than ANGLO ASIAN. However, Monument Mining is 1.91 times more volatile than ANGLO ASIAN MINING. It trades about 0.14 of its potential returns per unit of risk. ANGLO ASIAN MINING is currently generating about 0.08 per unit of risk. If you would invest  19.00  in Monument Mining Limited on December 23, 2024 and sell it today you would earn a total of  8.00  from holding Monument Mining Limited or generate 42.11% return on investment over 90 days.

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

Monument Mining Limited  vs.  ANGLO ASIAN MINING

Monument Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Monument Mining Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Monument Mining reported solid returns over the last few months and may actually be approaching a breakup point.

ANGLO ASIAN MINING

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANGLO ASIAN MINING are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, ANGLO ASIAN exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monument Mining and ANGLO ASIAN

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

The idea behind Monument Mining Limited and ANGLO ASIAN 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.