Correlation Between Ming Le and Santacruz Silver
Can any of the company-specific risk be diversified away by investing in both Ming Le and Santacruz Silver 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 Ming Le and Santacruz Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ming Le Sports and Santacruz Silver Mining, you can compare the effects of market volatilities on Ming Le and Santacruz Silver 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 Ming Le with a short position of Santacruz Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ming Le and Santacruz Silver.
Diversification Opportunities for Ming Le and Santacruz Silver
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ming and Santacruz is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ming Le Sports and Santacruz Silver Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santacruz Silver Mining and Ming Le 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 Ming Le Sports are associated (or correlated) with Santacruz Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santacruz Silver Mining has no effect on the direction of Ming Le i.e., Ming Le and Santacruz Silver go up and down completely randomly.
Pair Corralation between Ming Le and Santacruz Silver
Assuming the 90 days horizon Ming Le Sports is expected to generate 0.78 times more return on investment than Santacruz Silver. However, Ming Le Sports is 1.28 times less risky than Santacruz Silver. It trades about 0.09 of its potential returns per unit of risk. Santacruz Silver Mining is currently generating about -0.06 per unit of risk. If you would invest 100.00 in Ming Le Sports on September 22, 2024 and sell it today you would earn a total of 20.00 from holding Ming Le Sports or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ming Le Sports vs. Santacruz Silver Mining
Performance |
| Timeline |
| Ming Le Sports |
| Santacruz Silver Mining |
Ming Le and Santacruz Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ming Le and Santacruz Silver
The main advantage of trading using opposite Ming Le and Santacruz Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ming Le position performs unexpectedly, Santacruz Silver 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 Santacruz Silver will offset losses from the drop in Santacruz Silver's long position.The idea behind Ming Le Sports and Santacruz Silver Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Santacruz Silver vs. MCEWEN MINING INC | Santacruz Silver vs. ADRIATIC METALS LS 013355 | Santacruz Silver vs. KENNAMETAL INC | Santacruz Silver vs. AAC TECHNOLOGHLDGADR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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