Correlation Between Monumental Minerals and Anglo American
Can any of the company-specific risk be diversified away by investing in both Monumental Minerals and Anglo American 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 Monumental Minerals and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monumental Minerals Corp and Anglo American Platinum, you can compare the effects of market volatilities on Monumental Minerals and Anglo American 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 Monumental Minerals with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monumental Minerals and Anglo American.
Diversification Opportunities for Monumental Minerals and Anglo American
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Monumental and Anglo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Monumental Minerals Corp and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum and Monumental Minerals 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 Monumental Minerals Corp are associated (or correlated) with Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American Platinum has no effect on the direction of Monumental Minerals i.e., Monumental Minerals and Anglo American go up and down completely randomly.
Pair Corralation between Monumental Minerals and Anglo American
Assuming the 90 days horizon Monumental Minerals Corp is expected to generate 16.26 times more return on investment than Anglo American. However, Monumental Minerals is 16.26 times more volatile than Anglo American Platinum. It trades about 0.32 of its potential returns per unit of risk. Anglo American Platinum is currently generating about -0.17 per unit of risk. If you would invest 3.00 in Monumental Minerals Corp on October 9, 2024 and sell it today you would earn a total of 4.80 from holding Monumental Minerals Corp or generate 160.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monumental Minerals Corp vs. Anglo American Platinum
Performance |
| Timeline |
| Monumental Minerals Corp |
| Anglo American Platinum |
Monumental Minerals and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monumental Minerals and Anglo American
The main advantage of trading using opposite Monumental Minerals and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monumental Minerals position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Monumental Minerals vs. Silver Wolf Exploration | Monumental Minerals vs. Leocor Gold | Monumental Minerals vs. Riverside Resources | Monumental Minerals vs. Azucar Minerals |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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