Correlation Between Mundoro Capital and Carlin Gold

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

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

Diversification Opportunities for Mundoro Capital and Carlin Gold

0.62

Correlation Coefficient

Mundoro Capital  Carlin Gold

Poor diversification

The 3 months correlation between Mundoro and Carlin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mundoro Capital and Carlin Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlin Gold and Mundoro Capital 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 Mundoro Capital are associated (or correlated) with Carlin Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlin Gold has no effect on the direction of Mundoro Capital i.e., Mundoro Capital and Carlin Gold go up and down completely randomly.

Pair Corralation between Mundoro Capital and Carlin Gold

Assuming the 90 days horizon Mundoro Capital is expected to generate 1.6 times more return on investment than Carlin Gold. However, Mundoro Capital is 1.6 times more volatile than Carlin Gold. It trades about -0.12 of its potential returns per unit of risk. Carlin Gold is currently generating about -0.23 per unit of risk. If you would invest  18.00  in Mundoro Capital on October 24, 2024 and sell it today you would lose (1.00) from holding Mundoro Capital or give up 5.56% of portfolio value over 90 days.

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

Mundoro Capital  vs.  Carlin Gold

Mundoro Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mundoro Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Carlin Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlin Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Mundoro Capital and Carlin Gold

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

The idea behind Mundoro Capital and Carlin Gold 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.