Correlation Between Tamino Minerals and Mexican Gold

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

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

Diversification Opportunities for Tamino Minerals and Mexican Gold

0.27

Correlation Coefficient

Tamino Minerals  Mexican Gold

Modest diversification

The 3 months correlation between Tamino and Mexican is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tamino Minerals and Mexican Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexican Gold Mining and Tamino Minerals 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 Tamino Minerals are associated (or correlated) with Mexican Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexican Gold Mining has no effect on the direction of Tamino Minerals i.e., Tamino Minerals and Mexican Gold go up and down completely randomly.

Pair Corralation between Tamino Minerals and Mexican Gold

Given the investment horizon of 90 days Tamino Minerals is expected to generate 9.46 times more return on investment than Mexican Gold. However, Tamino Minerals is 9.46 times more volatile than Mexican Gold Mining. It trades about 0.13 of its potential returns per unit of risk. Mexican Gold Mining is currently generating about 0.11 per unit of risk. If you would invest  0.00  in Tamino Minerals on December 2, 2024 and sell it today you would earn a total of  0.02  from holding Tamino Minerals or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Tamino Minerals  vs.  Mexican Gold Mining

Tamino Minerals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tamino Minerals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Tamino Minerals displayed solid returns over the last few months and may actually be approaching a breakup point.

Mexican Gold Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mexican Gold Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Mexican Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tamino Minerals and Mexican Gold

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

The idea behind Tamino Minerals and Mexican Gold 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.