Correlation Between Mineral Mountain and AXIS Capital

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

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

Diversification Opportunities for Mineral Mountain and AXIS Capital

-0.3

Correlation Coefficient

Mineral Mountain  AXIS Capital

Very good diversification

The 3 months correlation between Mineral and AXIS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Mountain Mining and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings and Mineral Mountain 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 Mineral Mountain Mining are associated (or correlated) with AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of Mineral Mountain i.e., Mineral Mountain and AXIS Capital go up and down completely randomly.

Pair Corralation between Mineral Mountain and AXIS Capital

Given the investment horizon of 90 days Mineral Mountain Mining is expected to generate 36.17 times more return on investment than AXIS Capital. However, Mineral Mountain is 36.17 times more volatile than AXIS Capital Holdings. It trades about 0.06 of its potential returns per unit of risk. AXIS Capital Holdings is currently generating about 0.08 per unit of risk. If you would invest  4.52  in Mineral Mountain Mining on October 7, 2024 and sell it today you would lose (4.51) from holding Mineral Mountain Mining or give up 99.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Mineral Mountain Mining  vs.  AXIS Capital Holdings

Mineral Mountain Mining

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mineral Mountain Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Mineral Mountain displayed solid returns over the last few months and may actually be approaching a breakup point.

AXIS Capital Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AXIS Capital Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, AXIS Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mineral Mountain and AXIS Capital

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

The idea behind Mineral Mountain Mining and AXIS Capital Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.