Correlation Between Monument Mining and Alstria Office

Can any of the company-specific risk be diversified away by investing in both Monument Mining and Alstria Office 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 Alstria Office 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 alstria office REIT AG, you can compare the effects of market volatilities on Monument Mining and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Alstria Office.

Diversification Opportunities for Monument Mining and Alstria Office

-0.62

Correlation Coefficient

Monument Mining  Alstria Office

Excellent diversification

The 3 months correlation between Monument and Alstria is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of Monument Mining i.e., Monument Mining and Alstria Office go up and down completely randomly.

Pair Corralation between Monument Mining and Alstria Office

Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 1.29 times more return on investment than Alstria Office. However, Monument Mining is 1.29 times more volatile than alstria office REIT AG. It trades about 0.14 of its potential returns per unit of risk. alstria office REIT AG is currently generating about -0.12 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 Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Monument Mining Limited  vs.  alstria office REIT AG

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.

alstria office REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days alstria office REIT AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Monument Mining and Alstria Office

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

The idea behind Monument Mining Limited and alstria office REIT AG 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.