Correlation Between GoldMining and MT Bank
Can any of the company-specific risk be diversified away by investing in both GoldMining and MT Bank 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 GoldMining and MT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and MT Bank Corp, you can compare the effects of market volatilities on GoldMining and MT Bank 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 GoldMining with a short position of MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and MT Bank.
Diversification Opportunities for GoldMining and MT Bank
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GoldMining and 0JW2 is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank Corp and GoldMining 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 GoldMining are associated (or correlated) with MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of GoldMining i.e., GoldMining and MT Bank go up and down completely randomly.
Pair Corralation between GoldMining and MT Bank
Assuming the 90 days trading horizon GoldMining is expected to generate 2.5 times less return on investment than MT Bank. In addition to that, GoldMining is 1.98 times more volatile than MT Bank Corp. It trades about 0.02 of its total potential returns per unit of risk. MT Bank Corp is currently generating about 0.1 per unit of volatility. If you would invest 11,570 in MT Bank Corp on November 28, 2024 and sell it today you would earn a total of 7,663 from holding MT Bank Corp or generate 66.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 50.32% |
| Values | Daily Returns |
GoldMining vs. MT Bank Corp
Performance |
| Timeline |
| GoldMining |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| MT Bank Corp |
GoldMining and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and MT Bank
The main advantage of trading using opposite GoldMining and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| GoldMining vs. Liontrust Asset Management | GoldMining vs. Livermore Investments Group | GoldMining vs. BlackRock Frontiers Investment | GoldMining vs. Ruffer Investment |
| MT Bank vs. Eastman Chemical Co | MT Bank vs. United Internet AG | MT Bank vs. Seche Environnement SA | MT Bank vs. Batm Advanced Communications |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |