Correlation Between Metro Mining and Magna Mining
Can any of the company-specific risk be diversified away by investing in both Metro Mining and Magna 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 Metro Mining and Magna Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Mining Limited and Magna Mining, you can compare the effects of market volatilities on Metro Mining and Magna 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 Metro Mining with a short position of Magna Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Mining and Magna Mining.
Diversification Opportunities for Metro Mining and Magna Mining
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Metro and Magna is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Metro Mining Limited and Magna Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Mining and Metro Mining 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 Metro Mining Limited are associated (or correlated) with Magna Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna Mining has no effect on the direction of Metro Mining i.e., Metro Mining and Magna Mining go up and down completely randomly.
Pair Corralation between Metro Mining and Magna Mining
Assuming the 90 days horizon Metro Mining Limited is expected to generate 0.54 times more return on investment than Magna Mining. However, Metro Mining Limited is 1.86 times less risky than Magna Mining. It trades about 0.02 of its potential returns per unit of risk. Magna Mining is currently generating about 0.0 per unit of risk. If you would invest 5.06 in Metro Mining Limited on September 11, 2025 and sell it today you would earn a total of 0.06 from holding Metro Mining Limited or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Metro Mining Limited vs. Magna Mining
Performance |
| Timeline |
| Metro Mining Limited |
| Magna Mining |
Metro Mining and Magna Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Mining and Magna Mining
The main advantage of trading using opposite Metro Mining and Magna Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Mining position performs unexpectedly, Magna 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 Magna Mining will offset losses from the drop in Magna Mining's long position.| Metro Mining vs. CITIC Resources Holdings | Metro Mining vs. Worry Free Holdings | Metro Mining vs. Aurelia Metals Limited | Metro Mining vs. NorthIsle Copper and |
| Magna Mining vs. NorthIsle Copper and | Magna Mining vs. TIMIA Capital Corp | Magna Mining vs. Metro Mining Limited | Magna Mining vs. Worry Free Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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