Correlation Between NorthIsle Copper and Mundoro Capital

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

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

Diversification Opportunities for NorthIsle Copper and Mundoro Capital

-0.37

Correlation Coefficient

NorthIsle Copper  Mundoro Capital

Very good diversification

The 3 months correlation between NorthIsle and Mundoro is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding NorthIsle Copper and and Mundoro Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mundoro Capital and NorthIsle Copper 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 NorthIsle Copper and are associated (or correlated) with Mundoro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mundoro Capital has no effect on the direction of NorthIsle Copper i.e., NorthIsle Copper and Mundoro Capital go up and down completely randomly.

Pair Corralation between NorthIsle Copper and Mundoro Capital

Assuming the 90 days horizon NorthIsle Copper and is expected to generate 1.03 times more return on investment than Mundoro Capital. However, NorthIsle Copper is 1.03 times more volatile than Mundoro Capital. It trades about 0.18 of its potential returns per unit of risk. Mundoro Capital is currently generating about -0.04 per unit of risk. If you would invest  30.00  in NorthIsle Copper and on December 3, 2024 and sell it today you would earn a total of  16.00  from holding NorthIsle Copper and or generate 53.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

NorthIsle Copper and  vs.  Mundoro Capital

NorthIsle Copper

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NorthIsle Copper and are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NorthIsle Copper reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest fragile 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.

Pair Trading with NorthIsle Copper and Mundoro Capital

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

The idea behind NorthIsle Copper and and Mundoro Capital 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.