Correlation Between Sabvest Capital and MC Mining

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

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

Diversification Opportunities for Sabvest Capital and MC Mining

-0.64

Correlation Coefficient

Sabvest Capital  MC Mining

Excellent diversification

The 3 months correlation between Sabvest and MCZ is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sabvest Capital and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and Sabvest 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 Sabvest Capital are associated (or correlated) with MC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Mining has no effect on the direction of Sabvest Capital i.e., Sabvest Capital and MC Mining go up and down completely randomly.

Pair Corralation between Sabvest Capital and MC Mining

Assuming the 90 days trading horizon Sabvest Capital is expected to generate 0.43 times more return on investment than MC Mining. However, Sabvest Capital is 2.31 times less risky than MC Mining. It trades about 0.06 of its potential returns per unit of risk. MC Mining is currently generating about 0.02 per unit of risk. If you would invest  690,760  in Sabvest Capital on October 5, 2024 and sell it today you would earn a total of  229,240  from holding Sabvest Capital or generate 33.19% return on investment over 90 days.

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

Sabvest Capital  vs.  MC Mining

Sabvest Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sabvest Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Sabvest Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MC Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MC Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, MC Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sabvest Capital and MC Mining

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

The idea behind Sabvest Capital and MC Mining 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.