Correlation Between MC Mining and Ichor Coal
Can any of the company-specific risk be diversified away by investing in both MC Mining and Ichor Coal 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 MC Mining and Ichor Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MC Mining and Ichor Coal NV, you can compare the effects of market volatilities on MC Mining and Ichor Coal 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 MC Mining with a short position of Ichor Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of MC Mining and Ichor Coal.
Diversification Opportunities for MC Mining and Ichor Coal
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between G1V and Ichor is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding MC Mining and Ichor Coal NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Coal NV and MC 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 MC Mining are associated (or correlated) with Ichor Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Coal NV has no effect on the direction of MC Mining i.e., MC Mining and Ichor Coal go up and down completely randomly.
Pair Corralation between MC Mining and Ichor Coal
Assuming the 90 days horizon MC Mining is expected to generate 7.49 times more return on investment than Ichor Coal. However, MC Mining is 7.49 times more volatile than Ichor Coal NV. It trades about 0.21 of its potential returns per unit of risk. Ichor Coal NV is currently generating about -0.29 per unit of risk. If you would invest 0.05 in MC Mining on September 2, 2024 and sell it today you would earn a total of 0.10 from holding MC Mining or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MC Mining vs. Ichor Coal NV
Performance |
| Timeline |
| MC Mining |
| Ichor Coal NV |
MC Mining and Ichor Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MC Mining and Ichor Coal
The main advantage of trading using opposite MC Mining and Ichor Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MC Mining position performs unexpectedly, Ichor Coal 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 Ichor Coal will offset losses from the drop in Ichor Coal's long position.The idea behind MC Mining and Ichor Coal NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ichor Coal vs. Astral Foods Limited | Ichor Coal vs. Tyson Foods | Ichor Coal vs. CeoTronics AG | Ichor Coal vs. WT OFFSHORE |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |