Correlation Between Monument Mining and TRADEDOUBLER

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

Diversification Opportunities for Monument Mining and TRADEDOUBLER

0.38

Correlation Coefficient

Monument Mining  TRADEDOUBLER

Weak diversification

The 3 months correlation between Monument and TRADEDOUBLER is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK 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 TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of Monument Mining i.e., Monument Mining and TRADEDOUBLER go up and down completely randomly.

Pair Corralation between Monument Mining and TRADEDOUBLER

Assuming the 90 days trading horizon Monument Mining is expected to generate 1.31 times less return on investment than TRADEDOUBLER. But when comparing it to its historical volatility, Monument Mining Limited is 1.15 times less risky than TRADEDOUBLER. It trades about 0.16 of its potential returns per unit of risk. TRADEDOUBLER AB SK is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  28.00  in TRADEDOUBLER AB SK on December 25, 2024 and sell it today you would earn a total of  20.00  from holding TRADEDOUBLER AB SK or generate 71.43% return on investment over 90 days.

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

Monument Mining Limited  vs.  TRADEDOUBLER AB SK

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 12 (%) 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.

TRADEDOUBLER AB SK

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEDOUBLER AB SK are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRADEDOUBLER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monument Mining and TRADEDOUBLER

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

The idea behind Monument Mining Limited and TRADEDOUBLER AB SK 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.