Correlation Between Network Media and Monument Mining

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Network Media and Monument 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 Network Media and Monument Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Network Media Group and Monument Mining Limited, you can compare the effects of market volatilities on Network Media and Monument 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 Network Media with a short position of Monument Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network Media and Monument Mining.

Diversification Opportunities for Network Media and Monument Mining

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Network and Monument is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Network Media Group and Monument Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monument Mining and Network Media 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 Network Media Group are associated (or correlated) with Monument Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monument Mining has no effect on the direction of Network Media i.e., Network Media and Monument Mining go up and down completely randomly.

Pair Corralation between Network Media and Monument Mining

Assuming the 90 days horizon Network Media Group is expected to under-perform the Monument Mining. But the stock apears to be less risky and, when comparing its historical volatility, Network Media Group is 1.0 times less risky than Monument Mining. The stock trades about -0.26 of its potential returns per unit of risk. The Monument Mining Limited is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  16.00  in Monument Mining Limited on September 11, 2024 and sell it today you would earn a total of  12.00  from holding Monument Mining Limited or generate 75.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Network Media Group  vs.  Monument Mining Limited

 Performance 
       Timeline  
Network Media Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Network Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
Monument Mining 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Monument Mining Limited are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Monument Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Network Media and Monument Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Network Media and Monument Mining

The main advantage of trading using opposite Network Media and Monument Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network Media position performs unexpectedly, Monument 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 Monument Mining will offset losses from the drop in Monument Mining's long position.
The idea behind Network Media Group and Monument Mining Limited 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

Other Complementary Tools

Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Global Correlations
Find global opportunities by holding instruments from different markets
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital