Correlation Between 2028 Investment and Magnum Goldcorp

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Can any of the company-specific risk be diversified away by investing in both 2028 Investment and Magnum Goldcorp 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 2028 Investment and Magnum Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2028 Investment Grade and Magnum Goldcorp, you can compare the effects of market volatilities on 2028 Investment and Magnum Goldcorp 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 2028 Investment with a short position of Magnum Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2028 Investment and Magnum Goldcorp.

Diversification Opportunities for 2028 Investment and Magnum Goldcorp

0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between 2028 and Magnum is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding 2028 Investment Grade and Magnum Goldcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnum Goldcorp and 2028 Investment 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 2028 Investment Grade are associated (or correlated) with Magnum Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnum Goldcorp has no effect on the direction of 2028 Investment i.e., 2028 Investment and Magnum Goldcorp go up and down completely randomly.

Pair Corralation between 2028 Investment and Magnum Goldcorp

Assuming the 90 days trading horizon 2028 Investment is expected to generate 30.7 times less return on investment than Magnum Goldcorp. But when comparing it to its historical volatility, 2028 Investment Grade is 21.85 times less risky than Magnum Goldcorp. It trades about 0.04 of its potential returns per unit of risk. Magnum Goldcorp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Magnum Goldcorp on August 26, 2024 and sell it today you would lose (7.00) from holding Magnum Goldcorp or give up 58.33% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy46.77%
ValuesDaily Returns

2028 Investment Grade  vs.  Magnum Goldcorp

 Performance 
       Timeline  
2028 Investment Grade 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in 2028 Investment Grade are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, 2028 Investment is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Magnum Goldcorp 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Magnum Goldcorp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Magnum Goldcorp showed solid returns over the last few months and may actually be approaching a breakup point.

2028 Investment and Magnum Goldcorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 2028 Investment and Magnum Goldcorp

The main advantage of trading using opposite 2028 Investment and Magnum Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2028 Investment position performs unexpectedly, Magnum Goldcorp 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 Magnum Goldcorp will offset losses from the drop in Magnum Goldcorp's long position.
The idea behind 2028 Investment Grade and Magnum Goldcorp 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.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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