Correlation Between Labrador Iron and Monument Mining
Can any of the company-specific risk be diversified away by investing in both Labrador Iron and Monument 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 Labrador Iron and Monument Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labrador Iron Ore and Monument Mining Limited, you can compare the effects of market volatilities on Labrador Iron and Monument 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 Labrador Iron with a short position of Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labrador Iron and Monument Mining.
Diversification Opportunities for Labrador Iron and Monument Mining
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Labrador and Monument is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Labrador Iron Ore and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining and Labrador Iron 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 Labrador Iron Ore are associated (or correlated) with Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of Labrador Iron i.e., Labrador Iron and Monument Mining go up and down completely randomly.
Pair Corralation between Labrador Iron and Monument Mining
Assuming the 90 days trading horizon Labrador Iron Ore is expected to generate 0.29 times more return on investment than Monument Mining. However, Labrador Iron Ore is 3.45 times less risky than Monument Mining. It trades about -0.08 of its potential returns per unit of risk. Monument Mining Limited is currently generating about -0.09 per unit of risk. If you would invest 3,056 in Labrador Iron Ore on September 5, 2024 and sell it today you would lose (71.00) from holding Labrador Iron Ore or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labrador Iron Ore vs. Monument Mining Limited
Performance |
| Timeline |
| Labrador Iron Ore |
| Monument Mining |
Labrador Iron and Monument Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labrador Iron and Monument Mining
The main advantage of trading using opposite Labrador Iron and Monument Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labrador Iron position performs unexpectedly, Monument 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 Monument Mining will offset losses from the drop in Monument Mining's long position.| Labrador Iron vs. First Majestic Silver | Labrador Iron vs. Ivanhoe Energy | Labrador Iron vs. Orezone Gold Corp | Labrador Iron vs. Faraday Copper Corp |
| Monument Mining vs. Majestic Gold Corp | Monument Mining vs. Gunpoint Exploration | Monument Mining vs. Q Gold Resources | Monument Mining vs. MAS Gold Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |