Correlation Between Mantle Minerals and EP Financial
Can any of the company-specific risk be diversified away by investing in both Mantle Minerals and EP Financial 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 Mantle Minerals and EP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mantle Minerals Limited and EP Financial Group, you can compare the effects of market volatilities on Mantle Minerals and EP Financial 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 Mantle Minerals with a short position of EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mantle Minerals and EP Financial.
Diversification Opportunities for Mantle Minerals and EP Financial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mantle and EP1 is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mantle Minerals Limited and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group and Mantle 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 Mantle Minerals Limited are associated (or correlated) with EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of Mantle Minerals i.e., Mantle Minerals and EP Financial go up and down completely randomly.
Pair Corralation between Mantle Minerals and EP Financial
Assuming the 90 days trading horizon Mantle Minerals Limited is not expected to generate positive returns. Moreover, Mantle Minerals is 10.14 times more volatile than EP Financial Group. It trades away all of its potential returns to assume current level of volatility. EP Financial Group is currently generating about 0.05 per unit of risk. If you would invest 50.00 in EP Financial Group on September 4, 2024 and sell it today you would earn a total of 1.00 from holding EP Financial Group or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mantle Minerals Limited vs. EP Financial Group
Performance |
| Timeline |
| Mantle Minerals |
| EP Financial Group |
Mantle Minerals and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mantle Minerals and EP Financial
The main advantage of trading using opposite Mantle Minerals and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mantle Minerals position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.| Mantle Minerals vs. Accent Resources NL | Mantle Minerals vs. Hutchison Telecommunications | Mantle Minerals vs. Energy Resources | Mantle Minerals vs. GO2 People |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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