Correlation Between Ichor Coal and MC Mining

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

By analyzing existing cross correlation between Ichor Coal NV and MC Mining, you can compare the effects of market volatilities on Ichor Coal 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 Ichor Coal with a short position of MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichor Coal and MC Mining.

Diversification Opportunities for Ichor Coal and MC Mining

0.06

Correlation Coefficient

Ichor Coal  MC Mining

Significant diversification

The 3 months correlation between Ichor and G1V is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ichor Coal NV and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and Ichor Coal 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 Ichor Coal NV 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 Ichor Coal i.e., Ichor Coal and MC Mining go up and down completely randomly.

Pair Corralation between Ichor Coal and MC Mining

Assuming the 90 days trading horizon Ichor Coal NV is expected to under-perform the MC Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ichor Coal NV is 36.57 times less risky than MC Mining. The stock trades about -0.17 of its potential returns per unit of risk. The MC Mining is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.20  in MC Mining on September 23, 2024 and sell it today you would lose (0.05) from holding MC Mining or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	92.42%
Values	Daily Returns

Ichor Coal NV  vs.  MC Mining

Ichor Coal NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ichor Coal NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

MC Mining

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MC Mining are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MC Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ichor Coal and MC Mining

The main advantage of trading using opposite Ichor Coal and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichor Coal 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.

The idea behind Ichor Coal NV and MC Mining 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.