Correlation Between Matador Mining and Collective Mining
Can any of the company-specific risk be diversified away by investing in both Matador Mining and Collective 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 Matador Mining and Collective Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matador Mining Limited and Collective Mining, you can compare the effects of market volatilities on Matador Mining and Collective 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 Matador Mining with a short position of Collective Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matador Mining and Collective Mining.
Diversification Opportunities for Matador Mining and Collective Mining
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matador and Collective is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Matador Mining Limited and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining and Matador 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 Matador Mining Limited are associated (or correlated) with Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Matador Mining i.e., Matador Mining and Collective Mining go up and down completely randomly.
Pair Corralation between Matador Mining and Collective Mining
Assuming the 90 days horizon Matador Mining Limited is expected to generate 4.99 times more return on investment than Collective Mining. However, Matador Mining is 4.99 times more volatile than Collective Mining. It trades about 0.12 of its potential returns per unit of risk. Collective Mining is currently generating about 0.05 per unit of risk. If you would invest 3.78 in Matador Mining Limited on September 1, 2024 and sell it today you would earn a total of 2.70 from holding Matador Mining Limited or generate 71.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 55.81% |
| Values | Daily Returns |
Matador Mining Limited vs. Collective Mining
Performance |
| Timeline |
| Matador Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Collective Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Matador Mining and Collective Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matador Mining and Collective Mining
The main advantage of trading using opposite Matador Mining and Collective Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matador Mining position performs unexpectedly, Collective 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 Collective Mining will offset losses from the drop in Collective Mining's long position.| Matador Mining vs. Rio2 Limited | Matador Mining vs. Aurion Resources | Matador Mining vs. Norsemont Mining | Matador Mining vs. Minaurum Gold |
| Collective Mining vs. Aurion Resources | Collective Mining vs. Bluestone Resources | Collective Mining vs. Cartier Resources | Collective Mining vs. Antioquia Gold |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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