Correlation Between CeoTronics and MONGOLIAN MINING

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

By analyzing existing cross correlation between CeoTronics AG and MONGOLIAN MINING CRPREGS, you can compare the effects of market volatilities on CeoTronics and MONGOLIAN 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 CeoTronics with a short position of MONGOLIAN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and MONGOLIAN MINING.

Diversification Opportunities for CeoTronics and MONGOLIAN MINING

-0.49

Correlation Coefficient

CeoTronics  MONGOLIAN MINING

Very good diversification

The 3 months correlation between CeoTronics and MONGOLIAN is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and MONGOLIAN MINING CRPREGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONGOLIAN MINING CRPREGS and CeoTronics 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 CeoTronics AG are associated (or correlated) with MONGOLIAN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONGOLIAN MINING CRPREGS has no effect on the direction of CeoTronics i.e., CeoTronics and MONGOLIAN MINING go up and down completely randomly.

Pair Corralation between CeoTronics and MONGOLIAN MINING

Assuming the 90 days trading horizon CeoTronics AG is expected to generate 0.9 times more return on investment than MONGOLIAN MINING. However, CeoTronics AG is 1.11 times less risky than MONGOLIAN MINING. It trades about 0.09 of its potential returns per unit of risk. MONGOLIAN MINING CRPREGS is currently generating about 0.01 per unit of risk. If you would invest  516.00  in CeoTronics AG on September 25, 2024 and sell it today you would earn a total of  74.00  from holding CeoTronics AG or generate 14.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CeoTronics AG  vs.  MONGOLIAN MINING CRPREGS

CeoTronics AG

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CeoTronics AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, CeoTronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

MONGOLIAN MINING CRPREGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MONGOLIAN MINING CRPREGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MONGOLIAN MINING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CeoTronics and MONGOLIAN MINING

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

The idea behind CeoTronics AG and MONGOLIAN MINING CRPREGS 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.