Correlation Between Minerals Technologies and NeogamesSA

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Can any of the company-specific risk be diversified away by investing in both Minerals Technologies and NeogamesSA 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 Minerals Technologies and NeogamesSA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minerals Technologies and NeogamesSA, you can compare the effects of market volatilities on Minerals Technologies and NeogamesSA 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 Minerals Technologies with a short position of NeogamesSA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and NeogamesSA.

Diversification Opportunities for Minerals Technologies and NeogamesSA

0.68
  Correlation Coefficient

Poor diversification

The 3 months correlation between Minerals and NeogamesSA is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and NeogamesSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeogamesSA and Minerals Technologies 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 Minerals Technologies are associated (or correlated) with NeogamesSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeogamesSA has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and NeogamesSA go up and down completely randomly.

Pair Corralation between Minerals Technologies and NeogamesSA

Considering the 90-day investment horizon Minerals Technologies is expected to under-perform the NeogamesSA. In addition to that, Minerals Technologies is 3.82 times more volatile than NeogamesSA. It trades about -0.2 of its total potential returns per unit of risk. NeogamesSA is currently generating about 0.27 per unit of volatility. If you would invest  2,890  in NeogamesSA on January 20, 2024 and sell it today you would earn a total of  51.00  from holding NeogamesSA or generate 1.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.45%
ValuesDaily Returns

Minerals Technologies  vs.  NeogamesSA

 Performance 
       Timeline  
Minerals Technologies 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Minerals Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Minerals Technologies may actually be approaching a critical reversion point that can send shares even higher in May 2024.
NeogamesSA 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in NeogamesSA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, NeogamesSA is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Minerals Technologies and NeogamesSA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Minerals Technologies and NeogamesSA

The main advantage of trading using opposite Minerals Technologies and NeogamesSA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies position performs unexpectedly, NeogamesSA 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 NeogamesSA will offset losses from the drop in NeogamesSA's long position.
The idea behind Minerals Technologies and NeogamesSA 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.
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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