Correlation Between Ramaco Resources and Mongolian Mining
Can any of the company-specific risk be diversified away by investing in both Ramaco Resources and Mongolian 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 Ramaco Resources and Mongolian Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramaco Resources and Mongolian Mining, you can compare the effects of market volatilities on Ramaco Resources and Mongolian 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 Ramaco Resources with a short position of Mongolian Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramaco Resources and Mongolian Mining.
Diversification Opportunities for Ramaco Resources and Mongolian Mining
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ramaco and Mongolian is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ramaco Resources and Mongolian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mongolian Mining and Ramaco Resources 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 Ramaco Resources are associated (or correlated) with Mongolian Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mongolian Mining has no effect on the direction of Ramaco Resources i.e., Ramaco Resources and Mongolian Mining go up and down completely randomly.
Pair Corralation between Ramaco Resources and Mongolian Mining
Given the investment horizon of 90 days Ramaco Resources is expected to generate 1.21 times more return on investment than Mongolian Mining. However, Ramaco Resources is 1.21 times more volatile than Mongolian Mining. It trades about 0.02 of its potential returns per unit of risk. Mongolian Mining is currently generating about -0.05 per unit of risk. If you would invest 1,030 in Ramaco Resources on October 26, 2024 and sell it today you would lose (11.00) from holding Ramaco Resources or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ramaco Resources vs. Mongolian Mining
Performance |
| Timeline |
| Ramaco Resources |
| Mongolian Mining |
Ramaco Resources and Mongolian Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramaco Resources and Mongolian Mining
The main advantage of trading using opposite Ramaco Resources and Mongolian Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramaco Resources position performs unexpectedly, Mongolian 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 Mongolian Mining will offset losses from the drop in Mongolian Mining's long position.| Ramaco Resources vs. Warrior Met Coal | Ramaco Resources vs. Alpha Metallurgical Resources | Ramaco Resources vs. American Resources Corp | Ramaco Resources vs. SunCoke Energy |
| Mongolian Mining vs. Alpha Metallurgical Resources | Mongolian Mining vs. Warrior Met Coal | Mongolian Mining vs. Ramaco Resources | Mongolian Mining vs. SunCoke Energy |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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