Correlation Between Mundoro Capital and Edison Cobalt

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

By analyzing existing cross correlation between Mundoro Capital and Edison Cobalt Corp, you can compare the effects of market volatilities on Mundoro Capital and Edison Cobalt 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 Edison Cobalt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mundoro Capital and Edison Cobalt.

Diversification Opportunities for Mundoro Capital and Edison Cobalt

-0.02

Correlation Coefficient

Mundoro Capital  Edison Cobalt

Good diversification

The 3 months correlation between Mundoro and Edison is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mundoro Capital and Edison Cobalt Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edison Cobalt Corp 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 Edison Cobalt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edison Cobalt Corp has no effect on the direction of Mundoro Capital i.e., Mundoro Capital and Edison Cobalt go up and down completely randomly.

Pair Corralation between Mundoro Capital and Edison Cobalt

Assuming the 90 days horizon Mundoro Capital is expected to under-perform the Edison Cobalt. But the otc stock apears to be less risky and, when comparing its historical volatility, Mundoro Capital is 4.28 times less risky than Edison Cobalt. The otc stock trades about -0.06 of its potential returns per unit of risk. The Edison Cobalt Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  8.11  in Edison Cobalt Corp on September 12, 2024 and sell it today you would earn a total of  0.29  from holding Edison Cobalt Corp or generate 3.58% return on investment over 90 days.

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

Mundoro Capital  vs.  Edison Cobalt Corp

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. Despite latest abnormal performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Edison Cobalt Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Edison Cobalt Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Edison Cobalt reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mundoro Capital and Edison Cobalt

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

The idea behind Mundoro Capital and Edison Cobalt 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.