Correlation Between Ecora Resources and MONGOLIAN MINING

Can any of the company-specific risk be diversified away by investing in both Ecora Resources and MONGOLIAN MINING 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 Ecora Resources and MONGOLIAN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ecora Resources PLC and MONGOLIAN MINING CRPREGS, you can compare the effects of market volatilities on Ecora Resources and MONGOLIAN MINING 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 Ecora Resources with a short position of MONGOLIAN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecora Resources and MONGOLIAN MINING.

Diversification Opportunities for Ecora Resources and MONGOLIAN MINING

-0.29

Correlation Coefficient

Ecora Resources  MONGOLIAN MINING

Very good diversification

The 3 months correlation between Ecora and MONGOLIAN is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ecora Resources PLC and MONGOLIAN MINING CRPREGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONGOLIAN MINING CRPREGS and Ecora Resources 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 Ecora Resources PLC are associated (or correlated) with MONGOLIAN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONGOLIAN MINING CRPREGS has no effect on the direction of Ecora Resources i.e., Ecora Resources and MONGOLIAN MINING go up and down completely randomly.

Pair Corralation between Ecora Resources and MONGOLIAN MINING

Assuming the 90 days horizon Ecora Resources PLC is expected to generate 0.96 times more return on investment than MONGOLIAN MINING. However, Ecora Resources PLC is 1.04 times less risky than MONGOLIAN MINING. It trades about -0.05 of its potential returns per unit of risk. MONGOLIAN MINING CRPREGS is currently generating about -0.31 per unit of risk. If you would invest  76.00  in Ecora Resources PLC on September 23, 2024 and sell it today you would lose (2.00) from holding Ecora Resources PLC or give up 2.63% of portfolio value over 90 days.

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

Ecora Resources PLC  vs.  MONGOLIAN MINING CRPREGS

Ecora Resources PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecora Resources PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

MONGOLIAN MINING CRPREGS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MONGOLIAN MINING CRPREGS are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MONGOLIAN MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ecora Resources and MONGOLIAN MINING

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

The idea behind Ecora Resources PLC and MONGOLIAN MINING CRPREGS 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .