Correlation Between Kap Industrial and MC Mining
Can any of the company-specific risk be diversified away by investing in both Kap Industrial and MC Mining 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 Kap Industrial and MC Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kap Industrial Holdings and MC Mining, you can compare the effects of market volatilities on Kap Industrial and MC Mining 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 Kap Industrial with a short position of MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kap Industrial and MC Mining.
Diversification Opportunities for Kap Industrial and MC Mining
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kap and MCZ is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Kap Industrial Holdings and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and Kap Industrial 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 Kap Industrial Holdings are associated (or correlated) with MC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Mining has no effect on the direction of Kap Industrial i.e., Kap Industrial and MC Mining go up and down completely randomly.
Pair Corralation between Kap Industrial and MC Mining
Assuming the 90 days trading horizon Kap Industrial Holdings is expected to generate 0.58 times more return on investment than MC Mining. However, Kap Industrial Holdings is 1.73 times less risky than MC Mining. It trades about -0.05 of its potential returns per unit of risk. MC Mining is currently generating about -0.51 per unit of risk. If you would invest 30,100 in Kap Industrial Holdings on October 22, 2024 and sell it today you would lose (800.00) from holding Kap Industrial Holdings or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kap Industrial Holdings vs. MC Mining
Performance |
| Timeline |
| Kap Industrial Holdings |
| MC Mining |
Kap Industrial and MC Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kap Industrial and MC Mining
The main advantage of trading using opposite Kap Industrial and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kap Industrial position performs unexpectedly, MC Mining 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 MC Mining will offset losses from the drop in MC Mining's long position.| Kap Industrial vs. ABSA Bank Limited | Kap Industrial vs. We Buy Cars | Kap Industrial vs. Life Healthcare | Kap Industrial vs. Bytes Technology |
| MC Mining vs. We Buy Cars | MC Mining vs. Bytes Technology | MC Mining vs. Hosken Consolidated Investments | MC Mining vs. Brimstone Investment |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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