Correlation Between Mkango Resources and Optima Health
Can any of the company-specific risk be diversified away by investing in both Mkango Resources and Optima Health 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 Mkango Resources and Optima Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mkango Resources and Optima Health plc, you can compare the effects of market volatilities on Mkango Resources and Optima Health 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 Mkango Resources with a short position of Optima Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mkango Resources and Optima Health.
Diversification Opportunities for Mkango Resources and Optima Health
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mkango and Optima is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mkango Resources and Optima Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima Health plc and Mkango 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 Mkango Resources are associated (or correlated) with Optima Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima Health plc has no effect on the direction of Mkango Resources i.e., Mkango Resources and Optima Health go up and down completely randomly.
Pair Corralation between Mkango Resources and Optima Health
Assuming the 90 days trading horizon Mkango Resources is expected to generate 8.58 times more return on investment than Optima Health. However, Mkango Resources is 8.58 times more volatile than Optima Health plc. It trades about 0.13 of its potential returns per unit of risk. Optima Health plc is currently generating about 0.19 per unit of risk. If you would invest 795.00 in Mkango Resources on October 25, 2024 and sell it today you would earn a total of 105.00 from holding Mkango Resources or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Mkango Resources vs. Optima Health plc
Performance |
| Timeline |
| Mkango Resources |
| Optima Health plc |
Mkango Resources and Optima Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mkango Resources and Optima Health
The main advantage of trading using opposite Mkango Resources and Optima Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mkango Resources position performs unexpectedly, Optima Health 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 Optima Health will offset losses from the drop in Optima Health's long position.| Mkango Resources vs. Sydbank | Mkango Resources vs. Sparebank 1 SR | Mkango Resources vs. Liechtensteinische Landesbank AG | Mkango Resources vs. Metro Bank PLC |
| Optima Health vs. Toyota Motor Corp | Optima Health vs. SoftBank Group Corp | Optima Health vs. OTP Bank Nyrt | Optima Health vs. Agilent Technologies |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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