Correlation Between United States and Murchison Minerals

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

By analyzing existing cross correlation between United States Antimony and Murchison Minerals, you can compare the effects of market volatilities on United States and Murchison Minerals 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 United States with a short position of Murchison Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Murchison Minerals.

Diversification Opportunities for United States and Murchison Minerals

-0.12

Correlation Coefficient

United States  Murchison Minerals

Good diversification

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

Pair Corralation between United States and Murchison Minerals

Given the investment horizon of 90 days United States is expected to generate 1.2 times less return on investment than Murchison Minerals. But when comparing it to its historical volatility, United States Antimony is 1.41 times less risky than Murchison Minerals. It trades about 0.11 of its potential returns per unit of risk. Murchison Minerals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.75  in Murchison Minerals on September 5, 2024 and sell it today you would earn a total of  0.29  from holding Murchison Minerals or generate 38.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

United States Antimony  vs.  Murchison Minerals

United States Antimony

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United States Antimony are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, United States showed solid returns over the last few months and may actually be approaching a breakup point.

Murchison Minerals

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Murchison Minerals are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Murchison Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United States and Murchison Minerals

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

The idea behind United States Antimony and Murchison Minerals 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.