Correlation Between Monument Mining and FOKUS MINING

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

By analyzing existing cross correlation between Monument Mining Limited and FOKUS MINING P, you can compare the effects of market volatilities on Monument Mining and FOKUS 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 Monument Mining with a short position of FOKUS MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and FOKUS MINING.

Diversification Opportunities for Monument Mining and FOKUS MINING

0.28

Correlation Coefficient

Monument Mining  FOKUS MINING

Modest diversification

The 3 months correlation between Monument and FOKUS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and FOKUS MINING P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOKUS MINING P and Monument 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 Monument Mining Limited are associated (or correlated) with FOKUS MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOKUS MINING P has no effect on the direction of Monument Mining i.e., Monument Mining and FOKUS MINING go up and down completely randomly.

Pair Corralation between Monument Mining and FOKUS MINING

Assuming the 90 days trading horizon Monument Mining Limited is expected to under-perform the FOKUS MINING. But the stock apears to be less risky and, when comparing its historical volatility, Monument Mining Limited is 1.11 times less risky than FOKUS MINING. The stock trades about -0.01 of its potential returns per unit of risk. The FOKUS MINING P is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7.60  in FOKUS MINING P on April 24, 2025 and sell it today you would earn a total of  0.15  from holding FOKUS MINING P or generate 1.97% return on investment over 90 days.

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

Monument Mining Limited  vs.  FOKUS MINING P

Monument Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monument Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Monument Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

FOKUS MINING P

Risk-Adjusted Performance

Weak

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

Pair Trading with Monument Mining and FOKUS MINING

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

The idea behind Monument Mining Limited and FOKUS MINING P 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.