Correlation Between Magna Mining and Monarca Minerals
Can any of the company-specific risk be diversified away by investing in both Magna Mining and Monarca Minerals 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 Magna Mining and Monarca Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magna Mining and Monarca Minerals, you can compare the effects of market volatilities on Magna Mining and Monarca Minerals 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 Magna Mining with a short position of Monarca Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna Mining and Monarca Minerals.
Diversification Opportunities for Magna Mining and Monarca Minerals
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magna and Monarca is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Magna Mining and Monarca Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monarca Minerals and Magna Mining 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 Magna Mining are associated (or correlated) with Monarca Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monarca Minerals has no effect on the direction of Magna Mining i.e., Magna Mining and Monarca Minerals go up and down completely randomly.
Pair Corralation between Magna Mining and Monarca Minerals
Assuming the 90 days trading horizon Magna Mining is expected to generate 0.59 times more return on investment than Monarca Minerals. However, Magna Mining is 1.7 times less risky than Monarca Minerals. It trades about 0.06 of its potential returns per unit of risk. Monarca Minerals is currently generating about -0.13 per unit of risk. If you would invest 130.00 in Magna Mining on September 25, 2024 and sell it today you would earn a total of 15.00 from holding Magna Mining or generate 11.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Magna Mining vs. Monarca Minerals
Performance |
Timeline |
Magna Mining |
Monarca Minerals |
Magna Mining and Monarca Minerals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Magna Mining and Monarca Minerals
The main advantage of trading using opposite Magna Mining and Monarca Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna Mining position performs unexpectedly, Monarca Minerals 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 Monarca Minerals will offset losses from the drop in Monarca Minerals' long position.Magna Mining vs. Monarca Minerals | Magna Mining vs. Outcrop Gold Corp | Magna Mining vs. Grande Portage Resources | Magna Mining vs. Klondike Silver Corp |
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Check out your portfolio center.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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