Correlation Between Monument Mining and RTG Mining
Can any of the company-specific risk be diversified away by investing in both Monument Mining and RTG Mining 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 RTG Mining 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 RTG Mining, you can compare the effects of market volatilities on Monument Mining and RTG Mining 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 RTG Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and RTG Mining.
Diversification Opportunities for Monument Mining and RTG Mining
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monument and RTG is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and RTG Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTG Mining 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 RTG Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTG Mining has no effect on the direction of Monument Mining i.e., Monument Mining and RTG Mining go up and down completely randomly.
Pair Corralation between Monument Mining and RTG Mining
Assuming the 90 days horizon Monument Mining Limited is expected to generate 0.55 times more return on investment than RTG Mining. However, Monument Mining Limited is 1.82 times less risky than RTG Mining. It trades about 0.08 of its potential returns per unit of risk. RTG Mining is currently generating about 0.04 per unit of risk. If you would invest 7.00 in Monument Mining Limited on August 26, 2024 and sell it today you would earn a total of 22.00 from holding Monument Mining Limited or generate 314.29% 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. RTG Mining
Performance |
| Timeline |
| Monument Mining |
| RTG Mining |
Monument Mining and RTG Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and RTG Mining
The main advantage of trading using opposite Monument Mining and RTG Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, RTG Mining 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 RTG Mining will offset losses from the drop in RTG Mining'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 |
| RTG Mining vs. Capstone Mining Corp | RTG Mining vs. Plaza Retail REIT | RTG Mining vs. Xtract One Technologies | RTG Mining vs. Monument Mining Limited |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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