Correlation Between MC Mining and Nedbank
Can any of the company-specific risk be diversified away by investing in both MC Mining and Nedbank 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 MC Mining and Nedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MC Mining and Nedbank Group, you can compare the effects of market volatilities on MC Mining and Nedbank 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 MC Mining with a short position of Nedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MC Mining and Nedbank.
Diversification Opportunities for MC Mining and Nedbank
Weak diversification
The 3 months correlation between MCZ and Nedbank is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding MC Mining and Nedbank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nedbank Group and MC 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 MC Mining are associated (or correlated) with Nedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nedbank Group has no effect on the direction of MC Mining i.e., MC Mining and Nedbank go up and down completely randomly.
Pair Corralation between MC Mining and Nedbank
Assuming the 90 days trading horizon MC Mining is expected to under-perform the Nedbank. In addition to that, MC Mining is 3.78 times more volatile than Nedbank Group. It trades about -0.01 of its total potential returns per unit of risk. Nedbank Group is currently generating about 0.06 per unit of volatility. If you would invest 1,955,632 in Nedbank Group on November 2, 2024 and sell it today you would earn a total of 820,468 from holding Nedbank Group or generate 41.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MC Mining vs. Nedbank Group
Performance |
| Timeline |
| MC Mining |
| Nedbank Group |
MC Mining and Nedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MC Mining and Nedbank
The main advantage of trading using opposite MC Mining and Nedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MC Mining position performs unexpectedly, Nedbank 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 Nedbank will offset losses from the drop in Nedbank's long position.| MC Mining vs. Datatec | MC Mining vs. Safari Investments RSA | MC Mining vs. Boxer Retail | MC Mining vs. Trematon Capital Investments |
| Nedbank vs. Mantengu Mining | Nedbank vs. African Media Entertainment | Nedbank vs. CA Sales Holdings | Nedbank vs. Kumba Iron Ore |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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