Correlation Between Monument Mining and Open Text
Can any of the company-specific risk be diversified away by investing in both Monument Mining and Open Text 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 Monument Mining and Open Text into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Mining Limited and Open Text Corp, you can compare the effects of market volatilities on Monument Mining and Open Text 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 Monument Mining with a short position of Open Text. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Open Text.
Diversification Opportunities for Monument Mining and Open Text
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monument and Open is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Open Text Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Open Text Corp and Monument Mining 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 Monument Mining Limited are associated (or correlated) with Open Text. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Open Text Corp has no effect on the direction of Monument Mining i.e., Monument Mining and Open Text go up and down completely randomly.
Pair Corralation between Monument Mining and Open Text
Assuming the 90 days horizon Monument Mining Limited is expected to generate 2.58 times more return on investment than Open Text. However, Monument Mining is 2.58 times more volatile than Open Text Corp. It trades about 0.13 of its potential returns per unit of risk. Open Text Corp is currently generating about 0.06 per unit of risk. If you would invest 14.00 in Monument Mining Limited on September 3, 2024 and sell it today you would earn a total of 12.00 from holding Monument Mining Limited or generate 85.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. Open Text Corp
Performance |
| Timeline |
| Monument Mining |
| Open Text Corp |
Monument Mining and Open Text Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and Open Text
The main advantage of trading using opposite Monument Mining and Open Text positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, Open Text 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 Open Text will offset losses from the drop in Open Text's long position.| Monument Mining vs. Majestic Gold Corp | Monument Mining vs. Gunpoint Exploration | Monument Mining vs. Q Gold Resources | Monument Mining vs. MAS Gold Corp |
| Open Text vs. Wishpond Technologies | Open Text vs. Information Services | Open Text vs. Birchtech Corp | Open Text vs. Datable Technology 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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