Correlation Between Trematon Capital and MC Mining

Can any of the company-specific risk be diversified away by investing in both Trematon 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 Trematon 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 Trematon Capital Investments and MC Mining, you can compare the effects of market volatilities on Trematon 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 Trematon Capital with a short position of MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and MC Mining.

Diversification Opportunities for Trematon Capital and MC Mining

0.48

Correlation Coefficient

Trematon Capital  MC Mining

Very weak diversification

The 3 months correlation between Trematon and MCZ is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and Trematon 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 Trematon Capital Investments 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 Trematon Capital i.e., Trematon Capital and MC Mining go up and down completely randomly.

Pair Corralation between Trematon Capital and MC Mining

Assuming the 90 days trading horizon Trematon Capital Investments is expected to under-perform the MC Mining. In addition to that, Trematon Capital is 1.13 times more volatile than MC Mining. It trades about -0.09 of its total potential returns per unit of risk. MC Mining is currently generating about -0.07 per unit of volatility. If you would invest  17,500  in MC Mining on September 15, 2024 and sell it today you would lose (3,000) from holding MC Mining or give up 17.14% of portfolio value over 90 days.

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

Trematon Capital Investments  vs.  MC Mining

Trematon Capital Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trematon Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Trematon Capital and MC Mining

The main advantage of trading using opposite Trematon Capital and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon 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 Trematon Capital Investments 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.