Correlation Between MT Bank and GoldMining

Can any of the company-specific risk be diversified away by investing in both MT Bank and GoldMining 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 MT Bank and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MT Bank Corp and GoldMining, you can compare the effects of market volatilities on MT Bank and GoldMining 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 MT Bank with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and GoldMining.

Diversification Opportunities for MT Bank and GoldMining

0.16

Correlation Coefficient

MT Bank  GoldMining

Average diversification

The 3 months correlation between 0JW2 and GoldMining is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and MT Bank 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 MT Bank Corp are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of MT Bank i.e., MT Bank and GoldMining go up and down completely randomly.

Pair Corralation between MT Bank and GoldMining

Assuming the 90 days trading horizon MT Bank Corp is expected to generate 0.72 times more return on investment than GoldMining. However, MT Bank Corp is 1.39 times less risky than GoldMining. It trades about 0.05 of its potential returns per unit of risk. GoldMining is currently generating about -0.12 per unit of risk. If you would invest  17,611  in MT Bank Corp on September 21, 2024 and sell it today you would earn a total of  980.00  from holding MT Bank Corp or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	69.84%
Values	Daily Returns

MT Bank Corp  vs.  GoldMining

MT Bank Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MT Bank Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MT Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

GoldMining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoldMining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MT Bank and GoldMining

The main advantage of trading using opposite MT Bank and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.

The idea behind MT Bank Corp and GoldMining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.