Correlation Between Finexia Financial and Mantle Minerals

Can any of the company-specific risk be diversified away by investing in both Finexia Financial and Mantle Minerals 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 Finexia Financial and Mantle Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Finexia Financial Group and Mantle Minerals Limited, you can compare the effects of market volatilities on Finexia Financial and Mantle Minerals 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 Finexia Financial with a short position of Mantle Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finexia Financial and Mantle Minerals.

Diversification Opportunities for Finexia Financial and Mantle Minerals

-0.33

Correlation Coefficient

Finexia Financial  Mantle Minerals

Very good diversification

The 3 months correlation between Finexia and Mantle is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Finexia Financial Group and Mantle Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mantle Minerals and Finexia Financial 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 Finexia Financial Group are associated (or correlated) with Mantle Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mantle Minerals has no effect on the direction of Finexia Financial i.e., Finexia Financial and Mantle Minerals go up and down completely randomly.

Pair Corralation between Finexia Financial and Mantle Minerals

Assuming the 90 days trading horizon Finexia Financial Group is expected to generate 0.09 times more return on investment than Mantle Minerals. However, Finexia Financial Group is 11.17 times less risky than Mantle Minerals. It trades about -0.07 of its potential returns per unit of risk. Mantle Minerals Limited is currently generating about -0.04 per unit of risk. If you would invest  31.00  in Finexia Financial Group on October 8, 2024 and sell it today you would lose (1.00) from holding Finexia Financial Group or give up 3.23% of portfolio value over 90 days.

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

Finexia Financial Group  vs.  Mantle Minerals Limited

Finexia Financial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Finexia Financial Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Finexia Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mantle Minerals

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mantle Minerals Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Mantle Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Finexia Financial and Mantle Minerals

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

The idea behind Finexia Financial Group and Mantle Minerals Limited 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.