Correlation Between Trematon Capital and MC Mining
Can any of the company-specific risk be diversified away by investing in both Trematon Capital and MC 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 Trematon Capital and MC Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trematon Capital Investments and MC Mining, you can compare the effects of market volatilities on Trematon Capital and MC 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 Trematon Capital with a short position of MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and MC Mining.
Diversification Opportunities for Trematon Capital and MC Mining
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trematon and MCZ is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and Trematon Capital 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 Trematon Capital Investments are associated (or correlated) with MC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Mining has no effect on the direction of Trematon Capital i.e., Trematon Capital and MC Mining go up and down completely randomly.
Pair Corralation between Trematon Capital and MC Mining
Assuming the 90 days trading horizon Trematon Capital Investments is expected to generate 0.96 times more return on investment than MC Mining. However, Trematon Capital Investments is 1.04 times less risky than MC Mining. It trades about -0.11 of its potential returns per unit of risk. MC Mining is currently generating about -0.19 per unit of risk. If you would invest 25,500 in Trematon Capital Investments on November 2, 2024 and sell it today you would lose (4,500) from holding Trematon Capital Investments or give up 17.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trematon Capital Investments vs. MC Mining
Performance |
| Timeline |
| Trematon Capital Inv |
| MC Mining |
Trematon Capital and MC Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trematon Capital and MC Mining
The main advantage of trading using opposite Trematon Capital and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital position performs unexpectedly, MC 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 MC Mining will offset losses from the drop in MC Mining's long position.| Trematon Capital vs. Astoria Investments | Trematon Capital vs. Nedbank Group | Trematon Capital vs. Mantengu Mining | Trematon Capital vs. ABSA Bank Limited |
| MC Mining vs. Datatec | MC Mining vs. Safari Investments RSA | MC Mining vs. Boxer Retail | MC Mining vs. Trematon Capital Investments |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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