Correlation Between MAGNUM MINING and Compagnie

Can any of the company-specific risk be diversified away by investing in both MAGNUM MINING and Compagnie 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 Compagnie 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 Compagnie de Saint Gobain, you can compare the effects of market volatilities on MAGNUM MINING and Compagnie 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 Compagnie. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAGNUM MINING and Compagnie.

Diversification Opportunities for MAGNUM MINING and Compagnie

0.0

Correlation Coefficient

MAGNUM MINING  Compagnie

Pay attention - limited upside

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

Pair Corralation between MAGNUM MINING and Compagnie

If you would invest  6,097  in Compagnie de Saint Gobain on October 6, 2024 and sell it today you would earn a total of  2,463  from holding Compagnie de Saint Gobain or generate 40.4% 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.  Compagnie de Saint Gobain

MAGNUM MINING EXP

Risk-Adjusted Performance

0 of 100

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Compagnie de Saint

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie de Saint Gobain are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Compagnie is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MAGNUM MINING and Compagnie

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

The idea behind MAGNUM MINING EXP and Compagnie de Saint Gobain 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.