Correlation Between Mining Global and Gncc Capital

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

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

Diversification Opportunities for Mining Global and Gncc Capital

0.0

Correlation Coefficient

Mining Global  Gncc Capital

Pay attention - limited upside

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

Pair Corralation between Mining Global and Gncc Capital

Given the investment horizon of 90 days Mining Global is expected to generate 3.33 times less return on investment than Gncc Capital. But when comparing it to its historical volatility, Mining Global is 3.33 times less risky than Gncc Capital. It trades about 0.08 of its potential returns per unit of risk. Gncc Capital is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Gncc Capital on September 3, 2024 and sell it today you would earn a total of  0.01  from holding Gncc Capital or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mining Global  vs.  Gncc Capital

Mining Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mining Global has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Mining Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gncc Capital

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gncc Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Gncc Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mining Global and Gncc Capital

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

The idea behind Mining Global and Gncc Capital 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.