Correlation Between Hulamin and MC Mining

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

By analyzing existing cross correlation between Hulamin and MC Mining, you can compare the effects of market volatilities on Hulamin and MC 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 Hulamin with a short position of MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hulamin and MC Mining.

Diversification Opportunities for Hulamin and MC Mining

0.59

Correlation Coefficient

Hulamin  MC Mining

Very weak diversification

The 3 months correlation between Hulamin and MCZ is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hulamin and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and Hulamin 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 Hulamin are associated (or correlated) with MC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Mining has no effect on the direction of Hulamin i.e., Hulamin and MC Mining go up and down completely randomly.

Pair Corralation between Hulamin and MC Mining

Assuming the 90 days trading horizon Hulamin is expected to under-perform the MC Mining. In addition to that, Hulamin is 1.26 times more volatile than MC Mining. It trades about -0.22 of its total potential returns per unit of risk. MC Mining is currently generating about 0.02 per unit of volatility. If you would invest  12,500  in MC Mining on December 5, 2024 and sell it today you would earn a total of  0.00  from holding MC Mining or generate 0.0% return on investment over 90 days.

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

Hulamin  vs.  MC Mining

Hulamin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hulamin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

MC Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days MC Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Hulamin and MC Mining

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

The idea behind Hulamin and MC Mining 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.