Correlation Between Top Frontier and Manila Mining
Can any of the company-specific risk be diversified away by investing in both Top Frontier and Manila 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 Top Frontier and Manila Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Frontier Investment and Manila Mining Corp, you can compare the effects of market volatilities on Top Frontier and Manila 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 Top Frontier with a short position of Manila Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Frontier and Manila Mining.
Diversification Opportunities for Top Frontier and Manila Mining
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Top and Manila is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Top Frontier Investment and Manila Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Mining Corp and Top Frontier 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 Top Frontier Investment are associated (or correlated) with Manila Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Mining Corp has no effect on the direction of Top Frontier i.e., Top Frontier and Manila Mining go up and down completely randomly.
Pair Corralation between Top Frontier and Manila Mining
Assuming the 90 days trading horizon Top Frontier Investment is expected to generate 0.86 times more return on investment than Manila Mining. However, Top Frontier Investment is 1.17 times less risky than Manila Mining. It trades about 0.0 of its potential returns per unit of risk. Manila Mining Corp is currently generating about -0.04 per unit of risk. If you would invest 9,600 in Top Frontier Investment on November 27, 2024 and sell it today you would lose (3,600) from holding Top Frontier Investment or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.7% |
| Values | Daily Returns |
Top Frontier Investment vs. Manila Mining Corp
Performance |
| Timeline |
| Top Frontier Investment |
| Manila Mining Corp |
Top Frontier and Manila Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Frontier and Manila Mining
The main advantage of trading using opposite Top Frontier and Manila Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Frontier position performs unexpectedly, Manila 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 Manila Mining will offset losses from the drop in Manila Mining's long position.| Top Frontier vs. Philex Mining Corp | Top Frontier vs. Premiere Entertainment | Top Frontier vs. Jollibee Foods Corp | Top Frontier vs. Semirara Mining Corp |
| Manila Mining vs. Metro Retail Stores | Manila Mining vs. Figaro Coffee Group | Manila Mining vs. Union Bank of | Manila Mining vs. Robinsons Retail Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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