Correlation Between Monument Mining and Naturgy Energy
Can any of the company-specific risk be diversified away by investing in both Monument Mining and Naturgy Energy 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 Naturgy Energy 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 Naturgy Energy Group, you can compare the effects of market volatilities on Monument Mining and Naturgy Energy 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 Naturgy Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Naturgy Energy.
Diversification Opportunities for Monument Mining and Naturgy Energy
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monument and Naturgy is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Naturgy Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturgy Energy Group 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 Naturgy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturgy Energy Group has no effect on the direction of Monument Mining i.e., Monument Mining and Naturgy Energy go up and down completely randomly.
Pair Corralation between Monument Mining and Naturgy Energy
Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 5.06 times more return on investment than Naturgy Energy. However, Monument Mining is 5.06 times more volatile than Naturgy Energy Group. It trades about 0.31 of its potential returns per unit of risk. Naturgy Energy Group is currently generating about 0.15 per unit of risk. If you would invest 18.00 in Monument Mining Limited on October 26, 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 | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. Naturgy Energy Group
Performance |
| Timeline |
| Monument Mining |
| Naturgy Energy Group |
Monument Mining and Naturgy Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and Naturgy Energy
The main advantage of trading using opposite Monument Mining and Naturgy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, Naturgy Energy 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 Naturgy Energy will offset losses from the drop in Naturgy Energy's long position.| Monument Mining vs. CVW CLEANTECH INC | Monument Mining vs. Coor Service Management | Monument Mining vs. Carsales | Monument Mining vs. Cleanaway Waste Management |
| Naturgy Energy vs. Zijin Mining Group | Naturgy Energy vs. Brockhaus Capital Management | Naturgy Energy vs. Monument Mining Limited | Naturgy Energy vs. LANDSEA GREEN MANAGEMENT |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |