Correlation Between Ichor Coal and MC Mining

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

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

Diversification Opportunities for Ichor Coal and MC Mining

-0.53

Correlation Coefficient

Ichor Coal  MC Mining

Excellent diversification

The 3 months correlation between Ichor and G1V is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ichor Coal NV and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and Ichor Coal 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 Ichor Coal NV 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 Ichor Coal i.e., Ichor Coal and MC Mining go up and down completely randomly.

Pair Corralation between Ichor Coal and MC Mining

Assuming the 90 days trading horizon Ichor Coal NV is expected to generate 3.13 times more return on investment than MC Mining. However, Ichor Coal is 3.13 times more volatile than MC Mining. It trades about 0.07 of its potential returns per unit of risk. MC Mining is currently generating about 0.04 per unit of risk. If you would invest  2.40  in Ichor Coal NV on December 25, 2024 and sell it today you would lose (0.40) from holding Ichor Coal NV or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	91.67%
Values	Daily Returns

Ichor Coal NV  vs.  MC Mining

Ichor Coal NV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ichor Coal NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Ichor Coal displayed solid returns over the last few months and may actually be approaching a breakup point.

MC Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MC Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MC Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ichor Coal and MC Mining

The main advantage of trading using opposite Ichor Coal and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichor Coal 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 Ichor Coal NV 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..