Correlation Between Monument Mining and NEW MILLENNIUM
Can any of the company-specific risk be diversified away by investing in both Monument Mining and NEW MILLENNIUM 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 Monument Mining and NEW MILLENNIUM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Mining Limited and NEW MILLENNIUM IRON, you can compare the effects of market volatilities on Monument Mining and NEW MILLENNIUM 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 Monument Mining with a short position of NEW MILLENNIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and NEW MILLENNIUM.
Diversification Opportunities for Monument Mining and NEW MILLENNIUM
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Monument and NEW is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and NEW MILLENNIUM IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW MILLENNIUM IRON and Monument Mining 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 Monument Mining Limited are associated (or correlated) with NEW MILLENNIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW MILLENNIUM IRON has no effect on the direction of Monument Mining i.e., Monument Mining and NEW MILLENNIUM go up and down completely randomly.
Pair Corralation between Monument Mining and NEW MILLENNIUM
Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 2.11 times more return on investment than NEW MILLENNIUM. However, Monument Mining is 2.11 times more volatile than NEW MILLENNIUM IRON. It trades about 0.13 of its potential returns per unit of risk. NEW MILLENNIUM IRON is currently generating about 0.04 per unit of risk. If you would invest 19.00 in Monument Mining Limited on October 29, 2024 and sell it today you would earn a total of 2.00 from holding Monument Mining Limited or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. NEW MILLENNIUM IRON
Performance |
| Timeline |
| Monument Mining |
| NEW MILLENNIUM IRON |
Monument Mining and NEW MILLENNIUM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and NEW MILLENNIUM
The main advantage of trading using opposite Monument Mining and NEW MILLENNIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, NEW MILLENNIUM 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 NEW MILLENNIUM will offset losses from the drop in NEW MILLENNIUM's long position.| Monument Mining vs. QBE Insurance Group | Monument Mining vs. Japan Post Insurance | Monument Mining vs. PENN Entertainment | Monument Mining vs. SBI Insurance Group |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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