Correlation Between Mundoro Capital and Evergold Corp

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

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

Diversification Opportunities for Mundoro Capital and Evergold Corp

-0.11

Correlation Coefficient

Mundoro Capital  Evergold Corp

Good diversification

The 3 months correlation between Mundoro and Evergold is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Mundoro Capital and Evergold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evergold 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 Evergold Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evergold Corp has no effect on the direction of Mundoro Capital i.e., Mundoro Capital and Evergold Corp go up and down completely randomly.

Pair Corralation between Mundoro Capital and Evergold Corp

Assuming the 90 days horizon Mundoro Capital is expected to under-perform the Evergold Corp. But the otc stock apears to be less risky and, when comparing its historical volatility, Mundoro Capital is 3.42 times less risky than Evergold Corp. The otc stock trades about -0.08 of its potential returns per unit of risk. The Evergold Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Evergold Corp on December 4, 2024 and sell it today you would earn a total of  0.10  from holding Evergold Corp or generate 10.0% return on investment over 90 days.

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

Mundoro Capital  vs.  Evergold Corp

Mundoro Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mundoro Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Evergold Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evergold Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Evergold Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mundoro Capital and Evergold Corp

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

The idea behind Mundoro Capital and Evergold 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.