Correlation Between K92 Mining and Moneta Gold

Can any of the company-specific risk be diversified away by investing in both K92 Mining and Moneta Gold 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 K92 Mining and Moneta Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between K92 Mining and Moneta Gold, you can compare the effects of market volatilities on K92 Mining and Moneta Gold 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 K92 Mining with a short position of Moneta Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of K92 Mining and Moneta Gold.

Diversification Opportunities for K92 Mining and Moneta Gold

-0.43

Correlation Coefficient

K92 Mining  Moneta Gold

Very good diversification

The 3 months correlation between K92 and Moneta is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding K92 Mining and Moneta Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneta Gold and K92 Mining 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 K92 Mining are associated (or correlated) with Moneta Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneta Gold has no effect on the direction of K92 Mining i.e., K92 Mining and Moneta Gold go up and down completely randomly.

Pair Corralation between K92 Mining and Moneta Gold

Assuming the 90 days horizon K92 Mining is expected to generate 1.12 times more return on investment than Moneta Gold. However, K92 Mining is 1.12 times more volatile than Moneta Gold. It trades about 0.02 of its potential returns per unit of risk. Moneta Gold is currently generating about -0.05 per unit of risk. If you would invest  605.00  in K92 Mining on September 4, 2024 and sell it today you would earn a total of  35.00  from holding K92 Mining or generate 5.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	30.71%
Values	Daily Returns

K92 Mining  vs.  Moneta Gold

K92 Mining

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in K92 Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, K92 Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Moneta Gold

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with K92 Mining and Moneta Gold

The main advantage of trading using opposite K92 Mining and Moneta Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K92 Mining position performs unexpectedly, Moneta Gold 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 Moneta Gold will offset losses from the drop in Moneta Gold's long position.

The idea behind K92 Mining and Moneta Gold 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.