Correlation Between Monument Mining and Canso Credit
Can any of the company-specific risk be diversified away by investing in both Monument Mining and Canso Credit 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 Canso Credit 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 Canso Credit Trust, you can compare the effects of market volatilities on Monument Mining and Canso Credit 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 Canso Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Canso Credit.
Diversification Opportunities for Monument Mining and Canso Credit
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Monument and Canso is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Canso Credit Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canso Credit Trust 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 Canso Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canso Credit Trust has no effect on the direction of Monument Mining i.e., Monument Mining and Canso Credit go up and down completely randomly.
Pair Corralation between Monument Mining and Canso Credit
Assuming the 90 days horizon Monument Mining Limited is expected to generate 10.22 times more return on investment than Canso Credit. However, Monument Mining is 10.22 times more volatile than Canso Credit Trust. It trades about 0.08 of its potential returns per unit of risk. Canso Credit Trust is currently generating about 0.09 per unit of risk. If you would invest 7.00 in Monument Mining Limited on September 2, 2024 and sell it today you would earn a total of 19.00 from holding Monument Mining Limited or generate 271.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. Canso Credit Trust
Performance |
| Timeline |
| Monument Mining |
| Canso Credit Trust |
Monument Mining and Canso Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and Canso Credit
The main advantage of trading using opposite Monument Mining and Canso Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, Canso Credit 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 Canso Credit will offset losses from the drop in Canso Credit'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 |
| Canso Credit vs. MINT Income Fund | Canso Credit vs. Canadian High Income | Canso Credit vs. Blue Ribbon Income | Canso Credit vs. Australian REIT Income |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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