Correlation Between Mkango Resources and Elcora Advanced
Can any of the company-specific risk be diversified away by investing in both Mkango Resources and Elcora Advanced 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 Elcora Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mkango Resources and Elcora Advanced Materials, you can compare the effects of market volatilities on Mkango Resources and Elcora Advanced 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 Elcora Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mkango Resources and Elcora Advanced.
Diversification Opportunities for Mkango Resources and Elcora Advanced
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mkango and Elcora is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Mkango Resources and Elcora Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcora Advanced Materials 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 Elcora Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcora Advanced Materials has no effect on the direction of Mkango Resources i.e., Mkango Resources and Elcora Advanced go up and down completely randomly.
Pair Corralation between Mkango Resources and Elcora Advanced
Assuming the 90 days horizon Mkango Resources is expected to generate 3.32 times more return on investment than Elcora Advanced. However, Mkango Resources is 3.32 times more volatile than Elcora Advanced Materials. It trades about 0.16 of its potential returns per unit of risk. Elcora Advanced Materials is currently generating about -0.22 per unit of risk. If you would invest 11.00 in Mkango Resources on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Mkango Resources or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Mkango Resources vs. Elcora Advanced Materials
Performance |
| Timeline |
| Mkango Resources |
| Elcora Advanced Materials |
Mkango Resources and Elcora Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mkango Resources and Elcora Advanced
The main advantage of trading using opposite Mkango Resources and Elcora Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mkango Resources position performs unexpectedly, Elcora Advanced 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 Elcora Advanced will offset losses from the drop in Elcora Advanced's long position.| Mkango Resources vs. Eros Resources Corp | Mkango Resources vs. New Destiny Mining | Mkango Resources vs. Midnight Sun Mining | Mkango Resources vs. Montero Mining and |
| Elcora Advanced vs. Algoma Steel Group | Elcora Advanced vs. Champion Iron | Elcora Advanced vs. International Zeolite Corp | Elcora Advanced vs. European Residential Real |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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