Correlation Between Minbos Resources and Gtn
Can any of the company-specific risk be diversified away by investing in both Minbos Resources and Gtn 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 Minbos Resources and Gtn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minbos Resources and Gtn, you can compare the effects of market volatilities on Minbos Resources and Gtn 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 Minbos Resources with a short position of Gtn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minbos Resources and Gtn.
Diversification Opportunities for Minbos Resources and Gtn
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Minbos and Gtn is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Minbos Resources and Gtn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gtn and Minbos Resources 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 Minbos Resources are associated (or correlated) with Gtn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gtn has no effect on the direction of Minbos Resources i.e., Minbos Resources and Gtn go up and down completely randomly.
Pair Corralation between Minbos Resources and Gtn
Assuming the 90 days trading horizon Minbos Resources is expected to generate 1.48 times less return on investment than Gtn. In addition to that, Minbos Resources is 1.53 times more volatile than Gtn. It trades about 0.01 of its total potential returns per unit of risk. Gtn is currently generating about 0.03 per unit of volatility. If you would invest 38.00 in Gtn on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Gtn or generate 21.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minbos Resources vs. Gtn
Performance |
| Timeline |
| Minbos Resources |
| Gtn |
Minbos Resources and Gtn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minbos Resources and Gtn
The main advantage of trading using opposite Minbos Resources and Gtn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minbos Resources position performs unexpectedly, Gtn 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 Gtn will offset losses from the drop in Gtn's long position.| Minbos Resources vs. Aussie Broadband | Minbos Resources vs. Cleanaway Waste Management | Minbos Resources vs. Nova Eye Medical | Minbos Resources vs. K2 Asset Management |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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