Correlation Between Ora Banda and MFF Capital

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

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

Diversification Opportunities for Ora Banda and MFF Capital

-0.61

Correlation Coefficient

Ora Banda  MFF Capital

Excellent diversification

The 3 months correlation between Ora and MFF is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ora Banda Mining and MFF Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFF Capital Investments and Ora Banda 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 Ora Banda Mining are associated (or correlated) with MFF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFF Capital Investments has no effect on the direction of Ora Banda i.e., Ora Banda and MFF Capital go up and down completely randomly.

Pair Corralation between Ora Banda and MFF Capital

Assuming the 90 days trading horizon Ora Banda Mining is expected to generate 3.34 times more return on investment than MFF Capital. However, Ora Banda is 3.34 times more volatile than MFF Capital Investments. It trades about 0.21 of its potential returns per unit of risk. MFF Capital Investments is currently generating about -0.11 per unit of risk. If you would invest  68.00  in Ora Banda Mining on December 27, 2024 and sell it today you would earn a total of  38.00  from holding Ora Banda Mining or generate 55.88% return on investment over 90 days.

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

Ora Banda Mining  vs.  MFF Capital Investments

Ora Banda Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ora Banda Mining are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, Ora Banda unveiled solid returns over the last few months and may actually be approaching a breakup point.

MFF Capital Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days MFF Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Ora Banda and MFF Capital

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

The idea behind Ora Banda Mining and MFF Capital Investments 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.