Correlation Between Kiplin Metals and Magna Mining
Can any of the company-specific risk be diversified away by investing in both Kiplin Metals and Magna 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 Kiplin Metals and Magna Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kiplin Metals and Magna Mining, you can compare the effects of market volatilities on Kiplin Metals and Magna 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 Kiplin Metals with a short position of Magna Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiplin Metals and Magna Mining.
Diversification Opportunities for Kiplin Metals and Magna Mining
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kiplin and Magna is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kiplin Metals and Magna Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Mining and Kiplin Metals 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 Kiplin Metals are associated (or correlated) with Magna Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna Mining has no effect on the direction of Kiplin Metals i.e., Kiplin Metals and Magna Mining go up and down completely randomly.
Pair Corralation between Kiplin Metals and Magna Mining
Assuming the 90 days horizon Kiplin Metals is expected to generate 13.06 times more return on investment than Magna Mining. However, Kiplin Metals is 13.06 times more volatile than Magna Mining. It trades about 0.09 of its potential returns per unit of risk. Magna Mining is currently generating about 0.14 per unit of risk. If you would invest 39.00 in Kiplin Metals on September 3, 2024 and sell it today you would lose (12.00) from holding Kiplin Metals or give up 30.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kiplin Metals vs. Magna Mining
Performance |
| Timeline |
| Kiplin Metals |
| Magna Mining |
Kiplin Metals and Magna Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kiplin Metals and Magna Mining
The main advantage of trading using opposite Kiplin Metals and Magna Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kiplin Metals position performs unexpectedly, Magna 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 Magna Mining will offset losses from the drop in Magna Mining's long position.| Kiplin Metals vs. Algoma Steel Group | Kiplin Metals vs. Champion Iron | Kiplin Metals vs. International Zeolite Corp | Kiplin Metals vs. European Residential Real |
| Magna Mining vs. Brunswick Exploration | Magna Mining vs. Fireweed Zinc | Magna Mining vs. Emerita Resources Corp | Magna Mining vs. InZinc Mining |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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