Correlation Between Inventus Mining and Magna Terra

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

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

Diversification Opportunities for Inventus Mining and Magna Terra

0.69

Correlation Coefficient

Inventus Mining  Magna Terra

Poor diversification

The 3 months correlation between Inventus and Magna is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Inventus Mining Corp and Magna Terra Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Terra Minerals and Inventus 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 Inventus Mining Corp are associated (or correlated) with Magna Terra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna Terra Minerals has no effect on the direction of Inventus Mining i.e., Inventus Mining and Magna Terra go up and down completely randomly.

Pair Corralation between Inventus Mining and Magna Terra

Assuming the 90 days horizon Inventus Mining Corp is expected to generate 0.9 times more return on investment than Magna Terra. However, Inventus Mining Corp is 1.12 times less risky than Magna Terra. It trades about 0.21 of its potential returns per unit of risk. Magna Terra Minerals is currently generating about 0.15 per unit of risk. If you would invest  10.00  in Inventus Mining Corp on April 25, 2025 and sell it today you would earn a total of  14.00  from holding Inventus Mining Corp or generate 140.0% return on investment over 90 days.

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

Inventus Mining Corp  vs.  Magna Terra Minerals

Inventus Mining Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Inventus Mining Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Inventus Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Magna Terra Minerals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Magna Terra Minerals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Magna Terra showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inventus Mining and Magna Terra

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

The idea behind Inventus Mining Corp and Magna Terra Minerals 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.