Correlation Between Monument Mining and South Pacific
Can any of the company-specific risk be diversified away by investing in both Monument Mining and South Pacific 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 South Pacific 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 South Pacific Metals, you can compare the effects of market volatilities on Monument Mining and South Pacific 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 South Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and South Pacific.
Diversification Opportunities for Monument Mining and South Pacific
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Monument and South is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and South Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Pacific Metals 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 South Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Pacific Metals has no effect on the direction of Monument Mining i.e., Monument Mining and South Pacific go up and down completely randomly.
Pair Corralation between Monument Mining and South Pacific
Assuming the 90 days horizon Monument Mining Limited is expected to generate 0.49 times more return on investment than South Pacific. However, Monument Mining Limited is 2.04 times less risky than South Pacific. It trades about 0.07 of its potential returns per unit of risk. South Pacific Metals is currently generating about 0.03 per unit of risk. If you would invest 11.00 in Monument Mining Limited on October 12, 2024 and sell it today you would earn a total of 23.00 from holding Monument Mining Limited or generate 209.09% 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. South Pacific Metals
Performance |
| Timeline |
| Monument Mining |
| South Pacific Metals |
Monument Mining and South Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and South Pacific
The main advantage of trading using opposite Monument Mining and South Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining position performs unexpectedly, South Pacific 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 South Pacific will offset losses from the drop in South Pacific'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 |
| South Pacific vs. Monument Mining Limited | South Pacific vs. Arizona Gold Silver | South Pacific vs. Capstone Mining Corp | South Pacific vs. Metalero Mining 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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