Correlation Between MC Mining and Boxer Retail

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

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

Diversification Opportunities for MC Mining and Boxer Retail

0.08

Correlation Coefficient

MC Mining  Boxer Retail

Significant diversification

The 3 months correlation between MCZ and Boxer is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding MC Mining and Boxer Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxer Retail and MC 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 MC Mining are associated (or correlated) with Boxer Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxer Retail has no effect on the direction of MC Mining i.e., MC Mining and Boxer Retail go up and down completely randomly.

Pair Corralation between MC Mining and Boxer Retail

Assuming the 90 days trading horizon MC Mining is expected to generate 0.9 times more return on investment than Boxer Retail. However, MC Mining is 1.11 times less risky than Boxer Retail. It trades about 0.26 of its potential returns per unit of risk. Boxer Retail is currently generating about 0.22 per unit of risk. If you would invest  14,000  in MC Mining on September 24, 2024 and sell it today you would earn a total of  3,000  from holding MC Mining or generate 21.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

MC Mining  vs.  Boxer Retail

MC Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MC Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, MC Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Boxer Retail

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boxer Retail are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Boxer Retail exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MC Mining and Boxer Retail

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

The idea behind MC Mining and Boxer Retail 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.