Correlation Between Millbank Mining and CNJ Capital

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

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

Diversification Opportunities for Millbank Mining and CNJ Capital

0.0

Correlation Coefficient

Millbank Mining  CNJ Capital

Pay attention - limited upside

The 3 months correlation between Millbank and CNJ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Millbank Mining Corp and CNJ Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNJ Capital Investments and Millbank 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 Millbank Mining Corp are associated (or correlated) with CNJ Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNJ Capital Investments has no effect on the direction of Millbank Mining i.e., Millbank Mining and CNJ Capital go up and down completely randomly.

Pair Corralation between Millbank Mining and CNJ Capital

Assuming the 90 days trading horizon Millbank Mining Corp is expected to generate 1.7 times more return on investment than CNJ Capital. However, Millbank Mining is 1.7 times more volatile than CNJ Capital Investments. It trades about 0.06 of its potential returns per unit of risk. CNJ Capital Investments is currently generating about 0.08 per unit of risk. If you would invest  13.00  in Millbank Mining Corp on October 3, 2024 and sell it today you would earn a total of  34.00  from holding Millbank Mining Corp or generate 261.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	80.8%
Values	Daily Returns

Millbank Mining Corp  vs.  CNJ Capital Investments

Millbank Mining Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Millbank Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal essential indicators, Millbank Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CNJ Capital Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CNJ Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CNJ Capital is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Millbank Mining and CNJ Capital

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

The idea behind Millbank Mining Corp and CNJ Capital Investments 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.