Correlation Between Mantle Minerals and COG Financial

Can any of the company-specific risk be diversified away by investing in both Mantle Minerals and COG Financial 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 Mantle Minerals and COG Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mantle Minerals Limited and COG Financial Services, you can compare the effects of market volatilities on Mantle Minerals and COG Financial 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 Mantle Minerals with a short position of COG Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mantle Minerals and COG Financial.

Diversification Opportunities for Mantle Minerals and COG Financial

0.61

Correlation Coefficient

Mantle Minerals  COG Financial

Poor diversification

The 3 months correlation between Mantle and COG is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mantle Minerals Limited and COG Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COG Financial Services and Mantle Minerals 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 Mantle Minerals Limited are associated (or correlated) with COG Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COG Financial Services has no effect on the direction of Mantle Minerals i.e., Mantle Minerals and COG Financial go up and down completely randomly.

Pair Corralation between Mantle Minerals and COG Financial

Assuming the 90 days trading horizon Mantle Minerals Limited is expected to generate 8.74 times more return on investment than COG Financial. However, Mantle Minerals is 8.74 times more volatile than COG Financial Services. It trades about 0.08 of its potential returns per unit of risk. COG Financial Services is currently generating about -0.01 per unit of risk. If you would invest  0.25  in Mantle Minerals Limited on October 3, 2024 and sell it today you would lose (0.10) from holding Mantle Minerals Limited or give up 40.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.6%
Values	Daily Returns

Mantle Minerals Limited  vs.  COG Financial Services

Mantle Minerals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mantle Minerals Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Mantle Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

COG Financial Services

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COG Financial Services are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, COG Financial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mantle Minerals and COG Financial

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

The idea behind Mantle Minerals Limited and COG Financial Services 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.