Correlation Between Mongolian Mining and Corsa Coal
Can any of the company-specific risk be diversified away by investing in both Mongolian Mining and Corsa Coal 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 Mongolian Mining and Corsa Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mongolian Mining and Corsa Coal Corp, you can compare the effects of market volatilities on Mongolian Mining and Corsa Coal 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 Mongolian Mining with a short position of Corsa Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mongolian Mining and Corsa Coal.
Diversification Opportunities for Mongolian Mining and Corsa Coal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mongolian and Corsa is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mongolian Mining and Corsa Coal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsa Coal Corp and Mongolian 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 Mongolian Mining are associated (or correlated) with Corsa Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsa Coal Corp has no effect on the direction of Mongolian Mining i.e., Mongolian Mining and Corsa Coal go up and down completely randomly.
Pair Corralation between Mongolian Mining and Corsa Coal
Assuming the 90 days horizon Mongolian Mining is expected to generate 0.86 times more return on investment than Corsa Coal. However, Mongolian Mining is 1.16 times less risky than Corsa Coal. It trades about 0.08 of its potential returns per unit of risk. Corsa Coal Corp is currently generating about 0.03 per unit of risk. If you would invest 25.00 in Mongolian Mining on August 27, 2024 and sell it today you would earn a total of 75.00 from holding Mongolian Mining or generate 300.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mongolian Mining vs. Corsa Coal Corp
Performance |
| Timeline |
| Mongolian Mining |
| Corsa Coal Corp |
Mongolian Mining and Corsa Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mongolian Mining and Corsa Coal
The main advantage of trading using opposite Mongolian Mining and Corsa Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mongolian Mining position performs unexpectedly, Corsa Coal 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 Corsa Coal will offset losses from the drop in Corsa Coal's long position.| Mongolian Mining vs. Corsa Coal Corp | Mongolian Mining vs. Alpha Metallurgical Resources | Mongolian Mining vs. Arch Resources | Mongolian Mining vs. Astera Labs, Common |
| Corsa Coal vs. Ascendant Resources | Corsa Coal vs. Cantex Mine Development | Corsa Coal vs. Amarc Resources | Corsa Coal vs. Sterling Metals 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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