Correlation Between Mason Graphite and Altura Mining
Can any of the company-specific risk be diversified away by investing in both Mason Graphite and Altura 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 Mason Graphite and Altura Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mason Graphite and Altura Mining Limited, you can compare the effects of market volatilities on Mason Graphite and Altura 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 Mason Graphite with a short position of Altura Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mason Graphite and Altura Mining.
Diversification Opportunities for Mason Graphite and Altura Mining
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mason and Altura is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mason Graphite and Altura Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Mining Limited and Mason Graphite 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 Mason Graphite are associated (or correlated) with Altura Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Mining Limited has no effect on the direction of Mason Graphite i.e., Mason Graphite and Altura Mining go up and down completely randomly.
Pair Corralation between Mason Graphite and Altura Mining
Assuming the 90 days horizon Mason Graphite is expected to generate 0.38 times more return on investment than Altura Mining. However, Mason Graphite is 2.61 times less risky than Altura Mining. It trades about -0.29 of its potential returns per unit of risk. Altura Mining Limited is currently generating about -0.19 per unit of risk. If you would invest 4.87 in Mason Graphite on September 1, 2024 and sell it today you would lose (1.54) from holding Mason Graphite or give up 31.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mason Graphite vs. Altura Mining Limited
Performance |
| Timeline |
| Mason Graphite |
| Altura Mining Limited |
Mason Graphite and Altura Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mason Graphite and Altura Mining
The main advantage of trading using opposite Mason Graphite and Altura Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mason Graphite position performs unexpectedly, Altura 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 Altura Mining will offset losses from the drop in Altura Mining's long position.| Mason Graphite vs. Northern Graphite | Mason Graphite vs. Graphite One | Mason Graphite vs. Lomiko Metals | Mason Graphite vs. IGO Limited |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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