Correlation Between MC Mining and Life Healthcare
Can any of the company-specific risk be diversified away by investing in both MC Mining and Life Healthcare 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 Life Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MC Mining and Life Healthcare, you can compare the effects of market volatilities on MC Mining and Life Healthcare 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 Life Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of MC Mining and Life Healthcare.
Diversification Opportunities for MC Mining and Life Healthcare
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MCZ and Life is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding MC Mining and Life Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Healthcare 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 Life Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Healthcare has no effect on the direction of MC Mining i.e., MC Mining and Life Healthcare go up and down completely randomly.
Pair Corralation between MC Mining and Life Healthcare
Assuming the 90 days trading horizon MC Mining is expected to generate 5.84 times more return on investment than Life Healthcare. However, MC Mining is 5.84 times more volatile than Life Healthcare. It trades about -0.01 of its potential returns per unit of risk. Life Healthcare is currently generating about -0.15 per unit of risk. If you would invest 16,900 in MC Mining on December 28, 2024 and sell it today you would lose (3,900) from holding MC Mining or give up 23.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MC Mining vs. Life Healthcare
Performance |
Timeline |
MC Mining |
Life Healthcare |
MC Mining and Life Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MC Mining and Life Healthcare
The main advantage of trading using opposite MC Mining and Life Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MC Mining position performs unexpectedly, Life Healthcare 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 Life Healthcare will offset losses from the drop in Life Healthcare's long position.MC Mining vs. Harmony Gold Mining | MC Mining vs. CA Sales Holdings | MC Mining vs. Reinet Investments SCA | MC Mining vs. Zeder Investments |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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