Correlation Between Manila Mining and Crown Asia
Can any of the company-specific risk be diversified away by investing in both Manila Mining and Crown Asia 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 Manila Mining and Crown Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manila Mining Corp and Crown Asia Chemicals, you can compare the effects of market volatilities on Manila Mining and Crown Asia 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 Manila Mining with a short position of Crown Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manila Mining and Crown Asia.
Diversification Opportunities for Manila Mining and Crown Asia
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manila and Crown is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Manila Mining Corp and Crown Asia Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Asia Chemicals and Manila 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 Manila Mining Corp are associated (or correlated) with Crown Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Asia Chemicals has no effect on the direction of Manila Mining i.e., Manila Mining and Crown Asia go up and down completely randomly.
Pair Corralation between Manila Mining and Crown Asia
Assuming the 90 days trading horizon Manila Mining Corp is expected to generate 1.84 times more return on investment than Crown Asia. However, Manila Mining is 1.84 times more volatile than Crown Asia Chemicals. It trades about 0.58 of its potential returns per unit of risk. Crown Asia Chemicals is currently generating about 0.07 per unit of risk. If you would invest 0.27 in Manila Mining Corp on October 21, 2024 and sell it today you would earn a total of 0.06 from holding Manila Mining Corp or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 52.94% |
| Values | Daily Returns |
Manila Mining Corp vs. Crown Asia Chemicals
Performance |
| Timeline |
| Manila Mining Corp |
| Crown Asia Chemicals |
Manila Mining and Crown Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manila Mining and Crown Asia
The main advantage of trading using opposite Manila Mining and Crown Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manila Mining position performs unexpectedly, Crown Asia 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 Crown Asia will offset losses from the drop in Crown Asia's long position.| Manila Mining vs. Alliance Select Foods | Manila Mining vs. BDO Unibank | Manila Mining vs. Philex Mining Corp | Manila Mining vs. Metro Retail Stores |
| Crown Asia vs. Atlas Consolidated Mining | Crown Asia vs. Top Frontier Investment | Crown Asia vs. Prime Media Holdings | Crown Asia vs. Transpacific Broadband Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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