Correlation Between MAGNUM MINING and United Utilities

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

Diversification Opportunities for MAGNUM MINING and United Utilities

0.0

Correlation Coefficient

MAGNUM MINING  United Utilities

Pay attention - limited upside

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

Pair Corralation between MAGNUM MINING and United Utilities

If you would invest  1,244  in United Utilities Group on October 11, 2024 and sell it today you would lose (4.00) from holding United Utilities Group or give up 0.32% of portfolio value over 90 days.

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

MAGNUM MINING EXP  vs.  United Utilities Group

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.

United Utilities

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in United Utilities Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, United Utilities is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MAGNUM MINING and United Utilities

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

The idea behind MAGNUM MINING EXP and United Utilities Group 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.