Correlation Between Mindflair Plc and Eastinco Mining

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

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

Diversification Opportunities for Mindflair Plc and Eastinco Mining

0.67

Correlation Coefficient

Mindflair Plc  Eastinco Mining

Poor diversification

The 3 months correlation between Mindflair and Eastinco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mindflair Plc and Eastinco Mining Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastinco Mining Expl and Mindflair Plc 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 Mindflair Plc are associated (or correlated) with Eastinco Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastinco Mining Expl has no effect on the direction of Mindflair Plc i.e., Mindflair Plc and Eastinco Mining go up and down completely randomly.

Pair Corralation between Mindflair Plc and Eastinco Mining

Assuming the 90 days trading horizon Mindflair Plc is expected to generate 22.95 times less return on investment than Eastinco Mining. But when comparing it to its historical volatility, Mindflair Plc is 10.57 times less risky than Eastinco Mining. It trades about 0.07 of its potential returns per unit of risk. Eastinco Mining Exploration is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.65  in Eastinco Mining Exploration on September 1, 2024 and sell it today you would earn a total of  5,099  from holding Eastinco Mining Exploration or generate 784515.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.22%
Values	Daily Returns

Mindflair Plc  vs.  Eastinco Mining Exploration

Mindflair Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mindflair Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Eastinco Mining Expl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastinco Mining Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Mindflair Plc and Eastinco Mining

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

The idea behind Mindflair Plc and Eastinco Mining Exploration 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 Global Correlations module to find global opportunities by holding instruments from different markets.