Correlation Between Magnum Goldcorp and Minco Capital
Can any of the company-specific risk be diversified away by investing in both Magnum Goldcorp and Minco Capital 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 Magnum Goldcorp and Minco Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnum Goldcorp and Minco Capital Corp, you can compare the effects of market volatilities on Magnum Goldcorp and Minco Capital 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 Magnum Goldcorp with a short position of Minco Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnum Goldcorp and Minco Capital.
Diversification Opportunities for Magnum Goldcorp and Minco Capital
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magnum and Minco is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Magnum Goldcorp and Minco Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minco Capital Corp and Magnum Goldcorp 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 Magnum Goldcorp are associated (or correlated) with Minco Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minco Capital Corp has no effect on the direction of Magnum Goldcorp i.e., Magnum Goldcorp and Minco Capital go up and down completely randomly.
Pair Corralation between Magnum Goldcorp and Minco Capital
Assuming the 90 days horizon Magnum Goldcorp is expected to generate 6.25 times more return on investment than Minco Capital. However, Magnum Goldcorp is 6.25 times more volatile than Minco Capital Corp. It trades about 0.09 of its potential returns per unit of risk. Minco Capital Corp is currently generating about 0.09 per unit of risk. If you would invest 4.00 in Magnum Goldcorp on September 6, 2024 and sell it today you would lose (1.00) from holding Magnum Goldcorp or give up 25.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
Magnum Goldcorp vs. Minco Capital Corp
Performance |
Timeline |
Magnum Goldcorp |
Minco Capital Corp |
Magnum Goldcorp and Minco Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Magnum Goldcorp and Minco Capital
The main advantage of trading using opposite Magnum Goldcorp and Minco Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnum Goldcorp position performs unexpectedly, Minco Capital 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 Minco Capital will offset losses from the drop in Minco Capital's long position.Magnum Goldcorp vs. MAG Silver Corp | Magnum Goldcorp vs. Costco Wholesale Corp | Magnum Goldcorp vs. Arizona Gold Silver | Magnum Goldcorp vs. Canlan Ice Sports |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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