Correlation Between VELA TECHNOLPLC and Monument Mining

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

By analyzing existing cross correlation between VELA TECHNOLPLC LS 0001 and Monument Mining Limited, you can compare the effects of market volatilities on VELA TECHNOLPLC and Monument 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 VELA TECHNOLPLC with a short position of Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of VELA TECHNOLPLC and Monument Mining.

Diversification Opportunities for VELA TECHNOLPLC and Monument Mining

0.0

Correlation Coefficient

VELA TECHNOLPLC  Monument Mining

Pay attention - limited upside

The 3 months correlation between VELA and Monument is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VELA TECHNOLPLC LS 0001 and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining and VELA TECHNOLPLC 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 VELA TECHNOLPLC LS 0001 are associated (or correlated) with Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of VELA TECHNOLPLC i.e., VELA TECHNOLPLC and Monument Mining go up and down completely randomly.

Pair Corralation between VELA TECHNOLPLC and Monument Mining

If you would invest  18.00  in Monument Mining Limited on October 25, 2024 and sell it today you would earn a total of  5.00  from holding Monument Mining Limited or generate 27.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

VELA TECHNOLPLC LS 0001  vs.  Monument Mining Limited

VELA TECHNOLPLC LS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VELA TECHNOLPLC LS 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, VELA TECHNOLPLC is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Monument Mining

Risk-Adjusted Performance

8 of 100

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.

Pair Trading with VELA TECHNOLPLC and Monument Mining

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

The idea behind VELA TECHNOLPLC LS 0001 and Monument Mining 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.