Correlation Between InZinc Mining and Magna Mining
Can any of the company-specific risk be diversified away by investing in both InZinc Mining 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 InZinc Mining and Magna Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InZinc Mining and Magna Mining, you can compare the effects of market volatilities on InZinc Mining 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 InZinc Mining with a short position of Magna Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of InZinc Mining and Magna Mining.
Diversification Opportunities for InZinc Mining and Magna Mining
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between InZinc and Magna is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding InZinc Mining and Magna Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Mining and InZinc 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 InZinc Mining 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 InZinc Mining i.e., InZinc Mining and Magna Mining go up and down completely randomly.
Pair Corralation between InZinc Mining and Magna Mining
Assuming the 90 days horizon InZinc Mining is expected to generate 0.97 times more return on investment than Magna Mining. However, InZinc Mining is 1.03 times less risky than Magna Mining. It trades about 0.19 of its potential returns per unit of risk. Magna Mining is currently generating about 0.09 per unit of risk. If you would invest 77.00 in InZinc Mining on October 23, 2024 and sell it today you would earn a total of 11.00 from holding InZinc Mining or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
InZinc Mining vs. Magna Mining
Performance |
| Timeline |
| InZinc Mining |
| Magna Mining |
InZinc Mining and Magna Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InZinc Mining and Magna Mining
The main advantage of trading using opposite InZinc Mining and Magna Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InZinc Mining 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.| InZinc Mining vs. Brunswick Exploration | InZinc Mining vs. Sigma Lithium Resources | InZinc Mining vs. Emerita Resources Corp | InZinc Mining vs. Frontier Lithium |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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