Correlation Between Monument Mining and Plastic Omnium
Can any of the company-specific risk be diversified away by investing in both Monument Mining and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium, you can compare the effects of market volatilities on Monument Mining and Plastic Omnium 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 Plastic Omnium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Plastic Omnium.
Diversification Opportunities for Monument Mining and Plastic Omnium
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monument and Plastic is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plastic Omnium 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 Plastic Omnium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plastic Omnium has no effect on the direction of Monument Mining i.e., Monument Mining and Plastic Omnium go up and down completely randomly.
Pair Corralation between Monument Mining and Plastic Omnium
Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 2.19 times more return on investment than Plastic Omnium. However, Monument Mining is 2.19 times more volatile than Plastic Omnium. It trades about 0.39 of its potential returns per unit of risk. Plastic Omnium is currently generating about 0.07 per unit of risk. If you would invest 18.00 in Monument Mining Limited on October 16, 2024 and sell it today you would earn a total of 5.00 from holding Monument Mining Limited or generate 27.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Monument Mining Limited vs. Plastic Omnium
Performance |
| Timeline |
| Monument Mining |
| Plastic Omnium |
Monument Mining and Plastic Omnium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and Plastic Omnium
The main advantage of trading using opposite Monument Mining and Plastic Omnium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, Plastic Omnium 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 Plastic Omnium will offset losses from the drop in Plastic Omnium's long position.| Monument Mining vs. SOFI TECHNOLOGIES | Monument Mining vs. Agilent Technologies | Monument Mining vs. InterContinental Hotels Group | Monument Mining vs. Meli Hotels International |
| Plastic Omnium vs. Darden Restaurants | Plastic Omnium vs. SOGECLAIR SA INH | Plastic Omnium vs. DELTA AIR LINES | Plastic Omnium vs. Fair Isaac Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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