Correlation Between MC Mining and Lewis Group

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

By analyzing existing cross correlation between MC Mining and Lewis Group Limited, you can compare the effects of market volatilities on MC Mining and Lewis Group 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 Lewis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MC Mining and Lewis Group.

Diversification Opportunities for MC Mining and Lewis Group

-0.73

Correlation Coefficient

MC Mining  Lewis Group

Pay attention - limited upside

The 3 months correlation between MCZ and Lewis is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding MC Mining and Lewis Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lewis Group Limited 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 Lewis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lewis Group Limited has no effect on the direction of MC Mining i.e., MC Mining and Lewis Group go up and down completely randomly.

Pair Corralation between MC Mining and Lewis Group

Assuming the 90 days trading horizon MC Mining is expected to generate 50.67 times less return on investment than Lewis Group. In addition to that, MC Mining is 3.05 times more volatile than Lewis Group Limited. It trades about 0.0 of its total potential returns per unit of risk. Lewis Group Limited is currently generating about 0.08 per unit of volatility. If you would invest  421,041  in Lewis Group Limited on September 26, 2024 and sell it today you would earn a total of  376,959  from holding Lewis Group Limited or generate 89.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

MC Mining  vs.  Lewis Group Limited

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 latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Lewis Group Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lewis Group Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Lewis Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MC Mining and Lewis Group

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

The idea behind MC Mining and Lewis Group Limited 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 Global Correlations module to find global opportunities by holding instruments from different markets.