Correlation Between Mount Gibson and MFF Capital
Can any of the company-specific risk be diversified away by investing in both Mount Gibson and MFF Capital 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 Mount Gibson and MFF Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mount Gibson Iron and MFF Capital Investments, you can compare the effects of market volatilities on Mount Gibson and MFF Capital 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 Mount Gibson with a short position of MFF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mount Gibson and MFF Capital.
Diversification Opportunities for Mount Gibson and MFF Capital
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mount and MFF is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mount Gibson Iron and MFF Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFF Capital Investments and Mount Gibson 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 Mount Gibson Iron are associated (or correlated) with MFF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFF Capital Investments has no effect on the direction of Mount Gibson i.e., Mount Gibson and MFF Capital go up and down completely randomly.
Pair Corralation between Mount Gibson and MFF Capital
Assuming the 90 days trading horizon Mount Gibson Iron is expected to under-perform the MFF Capital. In addition to that, Mount Gibson is 2.52 times more volatile than MFF Capital Investments. It trades about -0.06 of its total potential returns per unit of risk. MFF Capital Investments is currently generating about 0.16 per unit of volatility. If you would invest 271.00 in MFF Capital Investments on September 1, 2024 and sell it today you would earn a total of 160.00 from holding MFF Capital Investments or generate 59.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mount Gibson Iron vs. MFF Capital Investments
Performance |
| Timeline |
| Mount Gibson Iron |
| MFF Capital Investments |
Mount Gibson and MFF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mount Gibson and MFF Capital
The main advantage of trading using opposite Mount Gibson and MFF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mount Gibson position performs unexpectedly, MFF Capital 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 MFF Capital will offset losses from the drop in MFF Capital's long position.| Mount Gibson vs. Northern Star Resources | Mount Gibson vs. Evolution Mining | Mount Gibson vs. Bluescope Steel | Mount Gibson vs. Sandfire Resources NL |
| MFF Capital vs. Stelar Metals | MFF Capital vs. Srj Technologies Group | MFF Capital vs. Autosports Group | MFF Capital vs. Perseus Mining |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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