Correlation Between Mongolia Growth and Metrospaces

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

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

Diversification Opportunities for Mongolia Growth and Metrospaces

0.25

Correlation Coefficient

Mongolia Growth  Metrospaces

Modest diversification

The 3 months correlation between Mongolia and Metrospaces is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mongolia Growth Group and Metrospaces in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metrospaces and Mongolia Growth 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 Mongolia Growth Group are associated (or correlated) with Metrospaces. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metrospaces has no effect on the direction of Mongolia Growth i.e., Mongolia Growth and Metrospaces go up and down completely randomly.

Pair Corralation between Mongolia Growth and Metrospaces

Assuming the 90 days horizon Mongolia Growth is expected to generate 866.02 times less return on investment than Metrospaces. But when comparing it to its historical volatility, Mongolia Growth Group is 203.09 times less risky than Metrospaces. It trades about 0.08 of its potential returns per unit of risk. Metrospaces is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Metrospaces on May 3, 2025 and sell it today you would lose (0.01) from holding Metrospaces or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mongolia Growth Group  vs.  Metrospaces

Mongolia Growth Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mongolia Growth Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Mongolia Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Metrospaces

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Metrospaces are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Metrospaces exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mongolia Growth and Metrospaces

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

The idea behind Mongolia Growth Group and Metrospaces 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.