Correlation Between ADRIATIC METALS and MAGNUM MINING
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS and MAGNUM 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 ADRIATIC METALS and MAGNUM MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and MAGNUM MINING EXP, you can compare the effects of market volatilities on ADRIATIC METALS and MAGNUM 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 ADRIATIC METALS with a short position of MAGNUM MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and MAGNUM MINING.
Diversification Opportunities for ADRIATIC METALS and MAGNUM MINING
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADRIATIC and MAGNUM is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and MAGNUM MINING EXP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNUM MINING EXP and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 are associated (or correlated) with MAGNUM MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNUM MINING EXP has no effect on the direction of ADRIATIC METALS i.e., ADRIATIC METALS and MAGNUM MINING go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and MAGNUM MINING
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 0.82 times more return on investment than MAGNUM MINING. However, ADRIATIC METALS LS 013355 is 1.22 times less risky than MAGNUM MINING. It trades about 0.16 of its potential returns per unit of risk. MAGNUM MINING EXP is currently generating about -0.22 per unit of risk. If you would invest 236.00 in ADRIATIC METALS LS 013355 on November 25, 2024 and sell it today you would earn a total of 38.00 from holding ADRIATIC METALS LS 013355 or generate 16.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. MAGNUM MINING EXP
Performance |
Timeline |
ADRIATIC METALS LS |
MAGNUM MINING EXP |
ADRIATIC METALS and MAGNUM MINING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ADRIATIC METALS and MAGNUM MINING
The main advantage of trading using opposite ADRIATIC METALS and MAGNUM MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS position performs unexpectedly, MAGNUM 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 MAGNUM MINING will offset losses from the drop in MAGNUM MINING's long position.ADRIATIC METALS vs. MidCap Financial Investment | ||
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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