Correlation Between MAGNUM MINING and BANK CENTRAL

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

By analyzing existing cross correlation between MAGNUM MINING EXP and BANK CENTRAL ASIA, you can compare the effects of market volatilities on MAGNUM MINING and BANK CENTRAL 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 MAGNUM MINING with a short position of BANK CENTRAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGNUM MINING and BANK CENTRAL.

Diversification Opportunities for MAGNUM MINING and BANK CENTRAL

0.0

Correlation Coefficient

MAGNUM MINING  BANK CENTRAL

Pay attention - limited upside

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

Pair Corralation between MAGNUM MINING and BANK CENTRAL

If you would invest  47.00  in BANK CENTRAL ASIA on October 4, 2024 and sell it today you would earn a total of  8.00  from holding BANK CENTRAL ASIA or generate 17.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MAGNUM MINING EXP  vs.  BANK CENTRAL ASIA

MAGNUM MINING EXP

Risk-Adjusted Performance

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Very Weak

Over the last 90 days MAGNUM MINING EXP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MAGNUM MINING is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

BANK CENTRAL ASIA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK CENTRAL ASIA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, BANK CENTRAL is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MAGNUM MINING and BANK CENTRAL

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

The idea behind MAGNUM MINING EXP and BANK CENTRAL ASIA 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.