Correlation Between Marlowe Plc and Mongolian Mining
Can any of the company-specific risk be diversified away by investing in both Marlowe Plc and Mongolian 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 Marlowe Plc and Mongolian Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marlowe plc and Mongolian Mining, you can compare the effects of market volatilities on Marlowe Plc and Mongolian 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 Marlowe Plc with a short position of Mongolian Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marlowe Plc and Mongolian Mining.
Diversification Opportunities for Marlowe Plc and Mongolian Mining
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Marlowe and Mongolian is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Marlowe plc and Mongolian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mongolian Mining and Marlowe Plc 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 Marlowe plc are associated (or correlated) with Mongolian Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mongolian Mining has no effect on the direction of Marlowe Plc i.e., Marlowe Plc and Mongolian Mining go up and down completely randomly.
Pair Corralation between Marlowe Plc and Mongolian Mining
Assuming the 90 days horizon Marlowe plc is expected to generate 1.35 times more return on investment than Mongolian Mining. However, Marlowe Plc is 1.35 times more volatile than Mongolian Mining. It trades about 0.05 of its potential returns per unit of risk. Mongolian Mining is currently generating about -0.04 per unit of risk. If you would invest 331.00 in Marlowe plc on August 27, 2024 and sell it today you would earn a total of 87.00 from holding Marlowe plc or generate 26.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marlowe plc vs. Mongolian Mining
Performance |
| Timeline |
| Marlowe plc |
| Mongolian Mining |
Marlowe Plc and Mongolian Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marlowe Plc and Mongolian Mining
The main advantage of trading using opposite Marlowe Plc and Mongolian Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marlowe Plc position performs unexpectedly, Mongolian 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 Mongolian Mining will offset losses from the drop in Mongolian Mining's long position.| Marlowe Plc vs. Securitas AB | Marlowe Plc vs. Secom Co Ltd | Marlowe Plc vs. Allegion PLC | Marlowe Plc vs. MSA Safety |
| Mongolian Mining vs. Corsa Coal Corp | Mongolian Mining vs. Alpha Metallurgical Resources | Mongolian Mining vs. Arch Resources | Mongolian Mining vs. Astera Labs, Common |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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