Correlation Between Marine Products and Minsud Resources

Can any of the company-specific risk be diversified away by investing in both Marine Products and Minsud Resources 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 Marine Products and Minsud Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Marine Products and Minsud Resources Corp, you can compare the effects of market volatilities on Marine Products and Minsud Resources 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 Marine Products with a short position of Minsud Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Minsud Resources.

Diversification Opportunities for Marine Products and Minsud Resources

0.12

Correlation Coefficient

Marine Products  Minsud Resources

Average diversification

The 3 months correlation between Marine and Minsud is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Minsud Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minsud Resources Corp and Marine Products 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 Marine Products are associated (or correlated) with Minsud Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minsud Resources Corp has no effect on the direction of Marine Products i.e., Marine Products and Minsud Resources go up and down completely randomly.

Pair Corralation between Marine Products and Minsud Resources

Considering the 90-day investment horizon Marine Products is expected to under-perform the Minsud Resources. But the stock apears to be less risky and, when comparing its historical volatility, Marine Products is 1.68 times less risky than Minsud Resources. The stock trades about -0.1 of its potential returns per unit of risk. The Minsud Resources Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  62.00  in Minsud Resources Corp on November 30, 2024 and sell it today you would earn a total of  3.00  from holding Minsud Resources Corp or generate 4.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Marine Products  vs.  Minsud Resources Corp

Marine Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marine Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Minsud Resources Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Minsud Resources Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Minsud Resources may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Marine Products and Minsud Resources

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

The idea behind Marine Products and Minsud Resources Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.