Correlation Between Minco Capital and Magnum Goldcorp
Can any of the company-specific risk be diversified away by investing in both Minco Capital and Magnum Goldcorp 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 Minco Capital and Magnum Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minco Capital Corp and Magnum Goldcorp, you can compare the effects of market volatilities on Minco Capital and Magnum Goldcorp 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 Minco Capital with a short position of Magnum Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minco Capital and Magnum Goldcorp.
Diversification Opportunities for Minco Capital and Magnum Goldcorp
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Minco and Magnum is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Minco Capital Corp and Magnum Goldcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnum Goldcorp and Minco Capital 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 Minco Capital Corp are associated (or correlated) with Magnum Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnum Goldcorp has no effect on the direction of Minco Capital i.e., Minco Capital and Magnum Goldcorp go up and down completely randomly.
Pair Corralation between Minco Capital and Magnum Goldcorp
Assuming the 90 days horizon Minco Capital Corp is not expected to generate positive returns. However, Minco Capital Corp is 4.1 times less risky than Magnum Goldcorp. It waists most of its returns potential to compensate for thr risk taken. Magnum Goldcorp is generating about 0.08 per unit of risk. If you would invest 6.00 in Magnum Goldcorp on August 29, 2024 and sell it today you would lose (1.00) from holding Magnum Goldcorp or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minco Capital Corp vs. Magnum Goldcorp
Performance |
| Timeline |
| Minco Capital Corp |
| Magnum Goldcorp |
Minco Capital and Magnum Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minco Capital and Magnum Goldcorp
The main advantage of trading using opposite Minco Capital and Magnum Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minco Capital position performs unexpectedly, Magnum Goldcorp 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 Magnum Goldcorp will offset losses from the drop in Magnum Goldcorp's long position.| Minco Capital vs. Cogeco Communications | Minco Capital vs. Enerev5 Metals | Minco Capital vs. Computer Modelling Group | Minco Capital vs. T2 Metals Corp |
| Magnum Goldcorp vs. First Majestic Silver | Magnum Goldcorp vs. Ivanhoe Energy | Magnum Goldcorp vs. Orezone Gold Corp | Magnum Goldcorp vs. Faraday Copper 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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