Correlation Between Cantex Mine and Magna Mining

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

By analyzing existing cross correlation between Cantex Mine Development and Magna Mining, you can compare the effects of market volatilities on Cantex Mine 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 Cantex Mine with a short position of Magna Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantex Mine and Magna Mining.

Diversification Opportunities for Cantex Mine and Magna Mining

-0.55

Correlation Coefficient

Cantex Mine  Magna Mining

Excellent diversification

The 3 months correlation between Cantex and Magna is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and Magna Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Mining and Cantex Mine 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 Cantex Mine Development 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 Cantex Mine i.e., Cantex Mine and Magna Mining go up and down completely randomly.

Pair Corralation between Cantex Mine and Magna Mining

Assuming the 90 days horizon Cantex Mine Development is expected to generate 2.26 times more return on investment than Magna Mining. However, Cantex Mine is 2.26 times more volatile than Magna Mining. It trades about 0.01 of its potential returns per unit of risk. Magna Mining is currently generating about 0.03 per unit of risk. If you would invest  14.00  in Cantex Mine Development on March 3, 2025 and sell it today you would lose (2.00) from holding Cantex Mine Development or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Cantex Mine Development  vs.  Magna Mining

Cantex Mine Development

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cantex Mine Development are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Cantex Mine may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Magna Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Magna Mining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Magna Mining may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Cantex Mine and Magna Mining

The main advantage of trading using opposite Cantex Mine and Magna Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantex Mine 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.

The idea behind Cantex Mine Development and Magna Mining 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.