Correlation Between Mongolia Growth and Urbanfund Corp
Can any of the company-specific risk be diversified away by investing in both Mongolia Growth and Urbanfund Corp 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 Mongolia Growth and Urbanfund Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mongolia Growth Group and Urbanfund Corp, you can compare the effects of market volatilities on Mongolia Growth and Urbanfund Corp 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 Mongolia Growth with a short position of Urbanfund Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mongolia Growth and Urbanfund Corp.
Diversification Opportunities for Mongolia Growth and Urbanfund Corp
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mongolia and Urbanfund is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mongolia Growth Group and Urbanfund Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urbanfund Corp and Mongolia Growth 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 Mongolia Growth Group are associated (or correlated) with Urbanfund Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urbanfund Corp has no effect on the direction of Mongolia Growth i.e., Mongolia Growth and Urbanfund Corp go up and down completely randomly.
Pair Corralation between Mongolia Growth and Urbanfund Corp
Assuming the 90 days horizon Mongolia Growth Group is expected to under-perform the Urbanfund Corp. In addition to that, Mongolia Growth is 1.04 times more volatile than Urbanfund Corp. It trades about -0.15 of its total potential returns per unit of risk. Urbanfund Corp is currently generating about -0.04 per unit of volatility. If you would invest 85.00 in Urbanfund Corp on September 1, 2024 and sell it today you would lose (2.00) from holding Urbanfund Corp or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mongolia Growth Group vs. Urbanfund Corp
Performance |
| Timeline |
| Mongolia Growth Group |
| Urbanfund Corp |
Mongolia Growth and Urbanfund Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mongolia Growth and Urbanfund Corp
The main advantage of trading using opposite Mongolia Growth and Urbanfund Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mongolia Growth position performs unexpectedly, Urbanfund Corp 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 Urbanfund Corp will offset losses from the drop in Urbanfund Corp's long position.| Mongolia Growth vs. Mongolia Growth Group | Mongolia Growth vs. Parkit Enterprise | Mongolia Growth vs. Inventronics | Mongolia Growth vs. Urbanfund Corp |
| Urbanfund Corp vs. Westbond Enterprises Corp | Urbanfund Corp vs. Imperial Equities | Urbanfund Corp vs. Findev Inc | Urbanfund Corp vs. Canadian Net Real |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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