Correlation Between Mongolian Mining and Peabody Energy
Can any of the company-specific risk be diversified away by investing in both Mongolian Mining and Peabody Energy 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 Mongolian Mining and Peabody Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mongolian Mining and Peabody Energy Corp, you can compare the effects of market volatilities on Mongolian Mining and Peabody Energy 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 Mongolian Mining with a short position of Peabody Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mongolian Mining and Peabody Energy.
Diversification Opportunities for Mongolian Mining and Peabody Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mongolian and Peabody is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mongolian Mining and Peabody Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peabody Energy Corp and Mongolian 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 Mongolian Mining are associated (or correlated) with Peabody Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peabody Energy Corp has no effect on the direction of Mongolian Mining i.e., Mongolian Mining and Peabody Energy go up and down completely randomly.
Pair Corralation between Mongolian Mining and Peabody Energy
Assuming the 90 days horizon Mongolian Mining is expected to generate 1.55 times less return on investment than Peabody Energy. In addition to that, Mongolian Mining is 1.32 times more volatile than Peabody Energy Corp. It trades about 0.11 of its total potential returns per unit of risk. Peabody Energy Corp is currently generating about 0.22 per unit of volatility. If you would invest 1,706 in Peabody Energy Corp on August 17, 2025 and sell it today you would earn a total of 1,181 from holding Peabody Energy Corp or generate 69.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mongolian Mining vs. Peabody Energy Corp
Performance |
| Timeline |
| Mongolian Mining |
| Peabody Energy Corp |
Mongolian Mining and Peabody Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mongolian Mining and Peabody Energy
The main advantage of trading using opposite Mongolian Mining and Peabody Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mongolian Mining position performs unexpectedly, Peabody Energy 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 Peabody Energy will offset losses from the drop in Peabody Energy's long position.| Mongolian Mining vs. Indo Tambangraya Megah | Mongolian Mining vs. Bukit Asam Tbk | Mongolian Mining vs. Freehold Royalties | Mongolian Mining vs. CIMC Enric Holdings |
| Peabody Energy vs. Warrior Met Coal | Peabody Energy vs. Alliance Resource Partners | Peabody Energy vs. Core Natural Resources, | Peabody Energy vs. Plains GP 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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