Correlation Between SunCoke Energy and Mosaic
Can any of the company-specific risk be diversified away by investing in both SunCoke Energy and Mosaic 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 SunCoke Energy and Mosaic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunCoke Energy and The Mosaic, you can compare the effects of market volatilities on SunCoke Energy and Mosaic 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 SunCoke Energy with a short position of Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunCoke Energy and Mosaic.
Diversification Opportunities for SunCoke Energy and Mosaic
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between SunCoke and Mosaic is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding SunCoke Energy and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic and SunCoke Energy 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 SunCoke Energy are associated (or correlated) with Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of SunCoke Energy i.e., SunCoke Energy and Mosaic go up and down completely randomly.
Pair Corralation between SunCoke Energy and Mosaic
Considering the 90-day investment horizon SunCoke Energy is expected to under-perform the Mosaic. But the stock apears to be less risky and, when comparing its historical volatility, SunCoke Energy is 1.47 times less risky than Mosaic. The stock trades about -0.31 of its potential returns per unit of risk. The The Mosaic is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,515 in The Mosaic on November 4, 2024 and sell it today you would earn a total of 274.00 from holding The Mosaic or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunCoke Energy vs. The Mosaic
Performance |
| Timeline |
| SunCoke Energy |
| Mosaic |
SunCoke Energy and Mosaic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunCoke Energy and Mosaic
The main advantage of trading using opposite SunCoke Energy and Mosaic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunCoke Energy position performs unexpectedly, Mosaic 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 Mosaic will offset losses from the drop in Mosaic's long position.| SunCoke Energy vs. Warrior Met Coal | SunCoke Energy vs. Alpha Metallurgical Resources | SunCoke Energy vs. American Resources Corp | SunCoke Energy vs. Ramaco Resources |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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