Correlation Between Cembra Money and Miton UK
Can any of the company-specific risk be diversified away by investing in both Cembra Money and Miton UK 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 Cembra Money and Miton UK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and Miton UK MicroCap, you can compare the effects of market volatilities on Cembra Money and Miton UK 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 Cembra Money with a short position of Miton UK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Miton UK.
Diversification Opportunities for Cembra Money and Miton UK
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cembra and Miton is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and Miton UK MicroCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miton UK MicroCap and Cembra Money 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 Cembra Money Bank are associated (or correlated) with Miton UK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miton UK MicroCap has no effect on the direction of Cembra Money i.e., Cembra Money and Miton UK go up and down completely randomly.
Pair Corralation between Cembra Money and Miton UK
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 2.44 times more return on investment than Miton UK. However, Cembra Money is 2.44 times more volatile than Miton UK MicroCap. It trades about 0.14 of its potential returns per unit of risk. Miton UK MicroCap is currently generating about 0.12 per unit of risk. If you would invest 7,945 in Cembra Money Bank on September 17, 2024 and sell it today you would earn a total of 255.00 from holding Cembra Money Bank or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cembra Money Bank vs. Miton UK MicroCap
Performance |
| Timeline |
| Cembra Money Bank |
| Miton UK MicroCap |
Cembra Money and Miton UK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and Miton UK
The main advantage of trading using opposite Cembra Money and Miton UK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, Miton UK 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 Miton UK will offset losses from the drop in Miton UK's long position.| Cembra Money vs. Samsung Electronics Co | Cembra Money vs. Samsung Electronics Co | Cembra Money vs. Hyundai Motor | Cembra Money vs. Reliance Industries Ltd |
| Miton UK vs. Synchrony Financial | Miton UK vs. Komercni Banka | Miton UK vs. Cembra Money Bank | Miton UK vs. mobilezone holding AG |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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