Correlation Between Monument Mining and DelphX Capital

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

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

Diversification Opportunities for Monument Mining and DelphX Capital

0.35

Correlation Coefficient

Monument Mining  DelphX Capital

Weak diversification

The 3 months correlation between Monument and DelphX is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and DelphX Capital Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DelphX Capital Markets and Monument 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 Monument Mining Limited are associated (or correlated) with DelphX Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DelphX Capital Markets has no effect on the direction of Monument Mining i.e., Monument Mining and DelphX Capital go up and down completely randomly.

Pair Corralation between Monument Mining and DelphX Capital

Assuming the 90 days horizon Monument Mining Limited is expected to generate 0.55 times more return on investment than DelphX Capital. However, Monument Mining Limited is 1.81 times less risky than DelphX Capital. It trades about 0.07 of its potential returns per unit of risk. DelphX Capital Markets is currently generating about 0.03 per unit of risk. If you would invest  10.00  in Monument Mining Limited on October 25, 2024 and sell it today you would earn a total of  22.00  from holding Monument Mining Limited or generate 220.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Monument Mining Limited  vs.  DelphX Capital Markets

Monument Mining

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Monument Mining Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Monument Mining may actually be approaching a critical reversion point that can send shares even higher in February 2025.

DelphX Capital Markets

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DelphX Capital Markets are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, DelphX Capital is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Monument Mining and DelphX Capital

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

The idea behind Monument Mining Limited and DelphX Capital Markets 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.