Correlation Between Mkango Resources and Midnight Sun
Can any of the company-specific risk be diversified away by investing in both Mkango Resources and Midnight Sun 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 Midnight Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mkango Resources and Midnight Sun Mining, you can compare the effects of market volatilities on Mkango Resources and Midnight Sun 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 Midnight Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mkango Resources and Midnight Sun.
Diversification Opportunities for Mkango Resources and Midnight Sun
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mkango and Midnight is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mkango Resources and Midnight Sun Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midnight Sun Mining 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 Midnight Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midnight Sun Mining has no effect on the direction of Mkango Resources i.e., Mkango Resources and Midnight Sun go up and down completely randomly.
Pair Corralation between Mkango Resources and Midnight Sun
Assuming the 90 days horizon Mkango Resources is expected to generate 4.31 times more return on investment than Midnight Sun. However, Mkango Resources is 4.31 times more volatile than Midnight Sun Mining. It trades about 0.16 of its potential returns per unit of risk. Midnight Sun Mining is currently generating about -0.04 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mkango Resources vs. Midnight Sun Mining
Performance |
| Timeline |
| Mkango Resources |
| Midnight Sun Mining |
Mkango Resources and Midnight Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mkango Resources and Midnight Sun
The main advantage of trading using opposite Mkango Resources and Midnight Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mkango Resources position performs unexpectedly, Midnight Sun 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 Midnight Sun will offset losses from the drop in Midnight Sun'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 |
| Midnight Sun vs. New Destiny Mining | Midnight Sun vs. Magnum Goldcorp | Midnight Sun vs. Asiabasemetals | Midnight Sun vs. Lupaka Gold Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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