Correlation Between Revival Gold and Mene

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

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

Diversification Opportunities for Revival Gold and Mene

0.34

Correlation Coefficient

Revival Gold  Mene

Weak diversification

The 3 months correlation between Revival and Mene is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Revival Gold and Mene Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mene Inc and Revival Gold 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 Revival Gold are associated (or correlated) with Mene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mene Inc has no effect on the direction of Revival Gold i.e., Revival Gold and Mene go up and down completely randomly.

Pair Corralation between Revival Gold and Mene

Assuming the 90 days horizon Revival Gold is expected to generate 0.75 times more return on investment than Mene. However, Revival Gold is 1.33 times less risky than Mene. It trades about 0.12 of its potential returns per unit of risk. Mene Inc is currently generating about 0.09 per unit of risk. If you would invest  28.00  in Revival Gold on December 29, 2024 and sell it today you would earn a total of  9.00  from holding Revival Gold or generate 32.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Revival Gold  vs.  Mene Inc

Revival Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Revival Gold are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Revival Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Mene Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mene Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Mene showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Revival Gold and Mene

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

The idea behind Revival Gold and Mene Inc 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.