Correlation Between Monument Mining and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both Monument Mining and Tianjin Capital 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 Tianjin Capital 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 Tianjin Capital Environmental, you can compare the effects of market volatilities on Monument Mining and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Tianjin Capital.
Diversification Opportunities for Monument Mining and Tianjin Capital
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Monument and Tianjin is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Monument Mining i.e., Monument Mining and Tianjin Capital go up and down completely randomly.
Pair Corralation between Monument Mining and Tianjin Capital
Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 4.26 times more return on investment than Tianjin Capital. However, Monument Mining is 4.26 times more volatile than Tianjin Capital Environmental. It trades about 0.13 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about -0.22 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Monument Mining |
| Tianjin Capital Envi |
Monument Mining and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and Tianjin Capital
The main advantage of trading using opposite Monument Mining and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital'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 |
| Tianjin Capital vs. NH Foods | Tianjin Capital vs. Maple Leaf Foods | Tianjin Capital vs. Nomad Foods | Tianjin Capital vs. MAGNUM MINING EXP |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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