Correlation Between Independence Gold and Mundoro Capital

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Can any of the company-specific risk be diversified away by investing in both Independence Gold and Mundoro Capital 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 Independence Gold and Mundoro Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Independence Gold Corp and Mundoro Capital, you can compare the effects of market volatilities on Independence Gold and Mundoro Capital 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 Independence Gold with a short position of Mundoro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Independence Gold and Mundoro Capital.

Diversification Opportunities for Independence Gold and Mundoro Capital

0.59
  Correlation Coefficient

Very weak diversification

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

Pair Corralation between Independence Gold and Mundoro Capital

Assuming the 90 days horizon Independence Gold Corp is expected to generate 2.57 times more return on investment than Mundoro Capital. However, Independence Gold is 2.57 times more volatile than Mundoro Capital. It trades about 0.02 of its potential returns per unit of risk. Mundoro Capital is currently generating about -0.04 per unit of risk. If you would invest  21.00  in Independence Gold Corp on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Independence Gold Corp or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Independence Gold Corp  vs.  Mundoro Capital

 Performance 
       Timeline  
Independence Gold Corp 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Independence Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Independence Gold may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Mundoro Capital 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mundoro Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Mundoro Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Independence Gold and Mundoro Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Independence Gold and Mundoro Capital

The main advantage of trading using opposite Independence Gold and Mundoro Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Independence Gold position performs unexpectedly, Mundoro Capital 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 Mundoro Capital will offset losses from the drop in Mundoro Capital's long position.
The idea behind Independence Gold Corp and Mundoro Capital 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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