Correlation Between Monument Mining and Crédit Agricole

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

Diversification Opportunities for Monument Mining and Crédit Agricole

0.55

Correlation Coefficient

Monument Mining  Crédit Agricole

Very weak diversification

The 3 months correlation between Monument and Crédit is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Crdit Agricole SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crdit Agricole SA 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 Crédit Agricole. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crdit Agricole SA has no effect on the direction of Monument Mining i.e., Monument Mining and Crédit Agricole go up and down completely randomly.

Pair Corralation between Monument Mining and Crédit Agricole

Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 3.68 times more return on investment than Crédit Agricole. However, Monument Mining is 3.68 times more volatile than Crdit Agricole SA. It trades about 0.1 of its potential returns per unit of risk. Crdit Agricole SA is currently generating about 0.33 per unit of risk. If you would invest  19.00  in Monument Mining Limited on December 21, 2024 and sell it today you would earn a total of  5.00  from holding Monument Mining Limited or generate 26.32% return on investment over 90 days.

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

Monument Mining Limited  vs.  Crdit Agricole SA

Monument Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Monument Mining Limited are ranked lower than 8 (%) 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.

Crdit Agricole SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Crdit Agricole SA are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Crédit Agricole reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Monument Mining and Crédit Agricole

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

The idea behind Monument Mining Limited and Crdit Agricole SA 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.