Correlation Between Progressive Planet and Murchison Minerals

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

By analyzing existing cross correlation between Progressive Planet Solutions and Murchison Minerals, you can compare the effects of market volatilities on Progressive Planet and Murchison Minerals 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 Progressive Planet with a short position of Murchison Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Planet and Murchison Minerals.

Diversification Opportunities for Progressive Planet and Murchison Minerals

0.03

Correlation Coefficient

Progressive Planet  Murchison Minerals

Significant diversification

The 3 months correlation between Progressive and Murchison is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Planet Solutions and Murchison Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murchison Minerals and Progressive Planet 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 Progressive Planet Solutions are associated (or correlated) with Murchison Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murchison Minerals has no effect on the direction of Progressive Planet i.e., Progressive Planet and Murchison Minerals go up and down completely randomly.

Pair Corralation between Progressive Planet and Murchison Minerals

Assuming the 90 days horizon Progressive Planet Solutions is expected to generate 0.64 times more return on investment than Murchison Minerals. However, Progressive Planet Solutions is 1.56 times less risky than Murchison Minerals. It trades about 0.18 of its potential returns per unit of risk. Murchison Minerals is currently generating about 0.1 per unit of risk. If you would invest  7.30  in Progressive Planet Solutions on September 5, 2024 and sell it today you would earn a total of  6.70  from holding Progressive Planet Solutions or generate 91.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Progressive Planet Solutions  vs.  Murchison Minerals

Progressive Planet

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Progressive Planet Solutions are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Progressive Planet reported solid returns over the last few months and may actually be approaching a breakup point.

Murchison Minerals

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Murchison Minerals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Murchison Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Progressive Planet and Murchison Minerals

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

The idea behind Progressive Planet Solutions and Murchison Minerals 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.

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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.