Correlation Between Hummingbird Resources and Monarch Mining

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

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

Diversification Opportunities for Hummingbird Resources and Monarch Mining

0.0

Correlation Coefficient

Hummingbird Resources  Monarch Mining

Pay attention - limited upside

The 3 months correlation between Hummingbird and Monarch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hummingbird Resources PLC and Monarch Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monarch Mining and Hummingbird 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 Hummingbird Resources PLC are associated (or correlated) with Monarch Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monarch Mining has no effect on the direction of Hummingbird Resources i.e., Hummingbird Resources and Monarch Mining go up and down completely randomly.

Pair Corralation between Hummingbird Resources and Monarch Mining

If you would invest  2.00  in Hummingbird Resources PLC on October 26, 2024 and sell it today you would earn a total of  1.40  from holding Hummingbird Resources PLC or generate 70.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Hummingbird Resources PLC  vs.  Monarch Mining

Hummingbird Resources PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hummingbird Resources PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hummingbird Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Monarch Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monarch Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Monarch 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 Hummingbird Resources and Monarch Mining

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

The idea behind Hummingbird Resources PLC and Monarch 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.