Correlation Between M3 Mining and Accent Resources
Can any of the company-specific risk be diversified away by investing in both M3 Mining and Accent Resources 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 M3 Mining and Accent Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M3 Mining and Accent Resources NL, you can compare the effects of market volatilities on M3 Mining and Accent Resources 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 M3 Mining with a short position of Accent Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of M3 Mining and Accent Resources.
Diversification Opportunities for M3 Mining and Accent Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between M3M and Accent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding M3 Mining and Accent Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accent Resources and M3 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 M3 Mining are associated (or correlated) with Accent Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accent Resources has no effect on the direction of M3 Mining i.e., M3 Mining and Accent Resources go up and down completely randomly.
Pair Corralation between M3 Mining and Accent Resources
Assuming the 90 days trading horizon M3 Mining is expected to under-perform the Accent Resources. But the stock apears to be less risky and, when comparing its historical volatility, M3 Mining is 1.09 times less risky than Accent Resources. The stock trades about -0.04 of its potential returns per unit of risk. The Accent Resources NL is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 0.80 in Accent Resources NL on September 12, 2024 and sell it today you would lose (0.20) from holding Accent Resources NL or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
M3 Mining vs. Accent Resources NL
Performance |
| Timeline |
| M3 Mining |
| Accent Resources |
M3 Mining and Accent Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M3 Mining and Accent Resources
The main advantage of trading using opposite M3 Mining and Accent Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M3 Mining position performs unexpectedly, Accent Resources 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 Accent Resources will offset losses from the drop in Accent Resources' long position.| M3 Mining vs. Northern Star Resources | M3 Mining vs. Evolution Mining | M3 Mining vs. Bluescope Steel | M3 Mining vs. Sandfire Resources NL |
| Accent Resources vs. Chalice Mining Limited | Accent Resources vs. M3 Mining | Accent Resources vs. Actinogen Medical | Accent Resources vs. Medical Developments International |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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