Correlation Between OD6 Metals and Mindax

Can any of the company-specific risk be diversified away by investing in both OD6 Metals and Mindax 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 OD6 Metals and Mindax into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between OD6 Metals and Mindax Limited, you can compare the effects of market volatilities on OD6 Metals and Mindax 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 OD6 Metals with a short position of Mindax. Check out your portfolio center. Please also check ongoing floating volatility patterns of OD6 Metals and Mindax.

Diversification Opportunities for OD6 Metals and Mindax

0.17

Correlation Coefficient

OD6 Metals  Mindax

Average diversification

The 3 months correlation between OD6 and Mindax is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding OD6 Metals and Mindax Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindax Limited and OD6 Metals 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 OD6 Metals are associated (or correlated) with Mindax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindax Limited has no effect on the direction of OD6 Metals i.e., OD6 Metals and Mindax go up and down completely randomly.

Pair Corralation between OD6 Metals and Mindax

Assuming the 90 days trading horizon OD6 Metals is expected to under-perform the Mindax. In addition to that, OD6 Metals is 1.77 times more volatile than Mindax Limited. It trades about -0.03 of its total potential returns per unit of risk. Mindax Limited is currently generating about -0.02 per unit of volatility. If you would invest  6.20  in Mindax Limited on September 25, 2024 and sell it today you would lose (2.40) from holding Mindax Limited or give up 38.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

OD6 Metals  vs.  Mindax Limited

OD6 Metals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OD6 Metals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, OD6 Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mindax Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mindax Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with OD6 Metals and Mindax

The main advantage of trading using opposite OD6 Metals and Mindax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OD6 Metals position performs unexpectedly, Mindax 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 Mindax will offset losses from the drop in Mindax's long position.

The idea behind OD6 Metals and Mindax 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.