Correlation Between Maritime Resources and Montero Mining

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

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

Diversification Opportunities for Maritime Resources and Montero Mining

0.3

Correlation Coefficient

Maritime Resources  Montero Mining

Weak diversification

The 3 months correlation between Maritime and Montero is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Maritime Resources Corp and Montero Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montero Mining and Maritime Resources 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 Maritime Resources Corp are associated (or correlated) with Montero Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montero Mining has no effect on the direction of Maritime Resources i.e., Maritime Resources and Montero Mining go up and down completely randomly.

Pair Corralation between Maritime Resources and Montero Mining

Assuming the 90 days horizon Maritime Resources Corp is expected to generate 1.71 times more return on investment than Montero Mining. However, Maritime Resources is 1.71 times more volatile than Montero Mining and. It trades about 0.08 of its potential returns per unit of risk. Montero Mining and is currently generating about 0.06 per unit of risk. If you would invest  4.50  in Maritime Resources Corp on October 6, 2024 and sell it today you would earn a total of  1.00  from holding Maritime Resources Corp or generate 22.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Maritime Resources Corp  vs.  Montero Mining and

Maritime Resources Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maritime Resources Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Maritime Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Montero Mining

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Maritime Resources and Montero Mining

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

The idea behind Maritime Resources Corp and Montero Mining and 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.