Correlation Between Nobel Resources and Mundoro Capital

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

By analyzing existing cross correlation between Nobel Resources Corp and Mundoro Capital, you can compare the effects of market volatilities on Nobel Resources and Mundoro 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 Nobel Resources with a short position of Mundoro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nobel Resources and Mundoro Capital.

Diversification Opportunities for Nobel Resources and Mundoro Capital

0.39

Correlation Coefficient

Nobel Resources  Mundoro Capital

Weak diversification

The 3 months correlation between Nobel and Mundoro is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nobel Resources Corp and Mundoro Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mundoro Capital and Nobel Resources 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 Nobel Resources Corp are associated (or correlated) with Mundoro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mundoro Capital has no effect on the direction of Nobel Resources i.e., Nobel Resources and Mundoro Capital go up and down completely randomly.

Pair Corralation between Nobel Resources and Mundoro Capital

Assuming the 90 days horizon Nobel Resources Corp is expected to under-perform the Mundoro Capital. In addition to that, Nobel Resources is 1.72 times more volatile than Mundoro Capital. It trades about -0.06 of its total potential returns per unit of risk. Mundoro Capital is currently generating about -0.09 per unit of volatility. If you would invest  16.00  in Mundoro Capital on September 14, 2024 and sell it today you would lose (3.00) from holding Mundoro Capital or give up 18.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Nobel Resources Corp  vs.  Mundoro Capital

Nobel Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nobel Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Mundoro Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mundoro Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Nobel Resources and Mundoro Capital

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

The idea behind Nobel Resources Corp and Mundoro Capital 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.