Correlation Between Minaurum Gold and Collective Mining

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

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

Diversification Opportunities for Minaurum Gold and Collective Mining

-0.12

Correlation Coefficient

Minaurum Gold  Collective Mining

Good diversification

The 3 months correlation between Minaurum and Collective is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Minaurum Gold and Collective Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collective Mining and Minaurum Gold 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 Minaurum Gold are associated (or correlated) with Collective Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collective Mining has no effect on the direction of Minaurum Gold i.e., Minaurum Gold and Collective Mining go up and down completely randomly.

Pair Corralation between Minaurum Gold and Collective Mining

Assuming the 90 days horizon Minaurum Gold is expected to generate 2.74 times less return on investment than Collective Mining. In addition to that, Minaurum Gold is 2.17 times more volatile than Collective Mining. It trades about 0.01 of its total potential returns per unit of risk. Collective Mining is currently generating about 0.07 per unit of volatility. If you would invest  319.00  in Collective Mining on September 4, 2024 and sell it today you would earn a total of  12.00  from holding Collective Mining or generate 3.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	34.92%
Values	Daily Returns

Minaurum Gold  vs.  Collective Mining

Minaurum Gold

Risk-Adjusted Performance

0 of 100

Very Weak

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

Collective Mining

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Collective Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile primary indicators, Collective Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Minaurum Gold and Collective Mining

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

The idea behind Minaurum Gold and Collective 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.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.