Correlation Between Mineral Financial and Guaranty Trust

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Can any of the company-specific risk be diversified away by investing in both Mineral Financial and Guaranty Trust 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 Mineral Financial and Guaranty Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mineral Financial Investments and Guaranty Trust Holding, you can compare the effects of market volatilities on Mineral Financial and Guaranty Trust 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 Mineral Financial with a short position of Guaranty Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mineral Financial and Guaranty Trust.

Diversification Opportunities for Mineral Financial and Guaranty Trust

MineralGuarantyDiversified AwayMineralGuarantyDiversified Away100%
0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Mineral and Guaranty is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Financial Investments and Guaranty Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Trust Holding and Mineral Financial 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 Mineral Financial Investments are associated (or correlated) with Guaranty Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Trust Holding has no effect on the direction of Mineral Financial i.e., Mineral Financial and Guaranty Trust go up and down completely randomly.

Pair Corralation between Mineral Financial and Guaranty Trust

Assuming the 90 days trading horizon Mineral Financial Investments is expected to generate 1.77 times more return on investment than Guaranty Trust. However, Mineral Financial is 1.77 times more volatile than Guaranty Trust Holding. It trades about 0.15 of its potential returns per unit of risk. Guaranty Trust Holding is currently generating about 0.07 per unit of risk. If you would invest  1,170  in Mineral Financial Investments on October 20, 2024 and sell it today you would earn a total of  380.00  from holding Mineral Financial Investments or generate 32.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Mineral Financial Investments  vs.  Guaranty Trust Holding

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -15-10-50510
JavaScript chart by amCharts 3.21.15MAFL GTCO
       Timeline  
Mineral Financial 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Mineral Financial Investments are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mineral Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan10111213141516
Guaranty Trust Holding 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Trust Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Guaranty Trust may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1.751.81.851.91.952

Mineral Financial and Guaranty Trust Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.01-7.5-4.98-2.470.04192.65.297.9810.6713.36 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15MAFL GTCO
       Returns  

Pair Trading with Mineral Financial and Guaranty Trust

The main advantage of trading using opposite Mineral Financial and Guaranty Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mineral Financial position performs unexpectedly, Guaranty Trust 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 Guaranty Trust will offset losses from the drop in Guaranty Trust's long position.
The idea behind Mineral Financial Investments and Guaranty Trust Holding 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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