Correlation Between Monument Mining and Keyence

Can any of the company-specific risk be diversified away by investing in both Monument Mining and Keyence 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 Keyence 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 Keyence, you can compare the effects of market volatilities on Monument Mining and Keyence 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 Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Keyence.

Diversification Opportunities for Monument Mining and Keyence

0.81

Correlation Coefficient

Monument Mining  Keyence

Very poor diversification

The 3 months correlation between Monument and Keyence is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence 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 Keyence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyence has no effect on the direction of Monument Mining i.e., Monument Mining and Keyence go up and down completely randomly.

Pair Corralation between Monument Mining and Keyence

Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 2.56 times more return on investment than Keyence. However, Monument Mining is 2.56 times more volatile than Keyence. It trades about -0.03 of its potential returns per unit of risk. Keyence is currently generating about -0.17 per unit of risk. If you would invest  27.00  in Monument Mining Limited on April 25, 2025 and sell it today you would lose (3.00) from holding Monument Mining Limited or give up 11.11% of portfolio value over 90 days.

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

Monument Mining Limited  vs.  Keyence

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Keyence

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keyence has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Monument Mining and Keyence

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

The idea behind Monument Mining Limited and Keyence 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.