Correlation Between Morgan Advanced and GobiMin

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

By analyzing existing cross correlation between Morgan Advanced Materials and GobiMin, you can compare the effects of market volatilities on Morgan Advanced and GobiMin 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 Morgan Advanced with a short position of GobiMin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morgan Advanced and GobiMin.

Diversification Opportunities for Morgan Advanced and GobiMin

-0.09

Correlation Coefficient

Morgan Advanced  GobiMin

Good diversification

The 3 months correlation between Morgan and GobiMin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Morgan Advanced Materials and GobiMin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GobiMin and Morgan Advanced 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 Morgan Advanced Materials are associated (or correlated) with GobiMin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GobiMin has no effect on the direction of Morgan Advanced i.e., Morgan Advanced and GobiMin go up and down completely randomly.

Pair Corralation between Morgan Advanced and GobiMin

If you would invest  127.00  in GobiMin on October 26, 2024 and sell it today you would earn a total of  0.00  from holding GobiMin or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Morgan Advanced Materials  vs.  GobiMin

Morgan Advanced Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morgan Advanced Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GobiMin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GobiMin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, GobiMin is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Morgan Advanced and GobiMin

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

The idea behind Morgan Advanced Materials and GobiMin 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.