Correlation Between Monument Mining and Oculus VisionTech
Can any of the company-specific risk be diversified away by investing in both Monument Mining and Oculus VisionTech 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 Oculus VisionTech 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 Oculus VisionTech, you can compare the effects of market volatilities on Monument Mining and Oculus VisionTech 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 Oculus VisionTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Oculus VisionTech.
Diversification Opportunities for Monument Mining and Oculus VisionTech
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Monument and Oculus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Oculus VisionTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oculus VisionTech 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 Oculus VisionTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oculus VisionTech has no effect on the direction of Monument Mining i.e., Monument Mining and Oculus VisionTech go up and down completely randomly.
Pair Corralation between Monument Mining and Oculus VisionTech
Assuming the 90 days horizon Monument Mining Limited is expected to generate 0.77 times more return on investment than Oculus VisionTech. However, Monument Mining Limited is 1.3 times less risky than Oculus VisionTech. It trades about 0.13 of its potential returns per unit of risk. Oculus VisionTech is currently generating about 0.04 per unit of risk. If you would invest 14.00 in Monument Mining Limited on September 1, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. Oculus VisionTech
Performance |
| Timeline |
| Monument Mining |
| Oculus VisionTech |
Monument Mining and Oculus VisionTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and Oculus VisionTech
The main advantage of trading using opposite Monument Mining and Oculus VisionTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, Oculus VisionTech 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 Oculus VisionTech will offset losses from the drop in Oculus VisionTech's long position.| Monument Mining vs. First Majestic Silver | Monument Mining vs. Ivanhoe Energy | Monument Mining vs. Orezone Gold Corp | Monument Mining vs. Faraday Copper Corp |
| Oculus VisionTech vs. Northview Residential REIT | Oculus VisionTech vs. Winshear Gold Corp | Oculus VisionTech vs. Wilmington Capital Management | Oculus VisionTech vs. Till Capital |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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