Correlation Between Mobilezone Holding and London Security
Can any of the company-specific risk be diversified away by investing in both Mobilezone Holding and London Security 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 Mobilezone Holding and London Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mobilezone holding AG and London Security Plc, you can compare the effects of market volatilities on Mobilezone Holding and London Security 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 Mobilezone Holding with a short position of London Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobilezone Holding and London Security.
Diversification Opportunities for Mobilezone Holding and London Security
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mobilezone and London is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding mobilezone holding AG and London Security Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on London Security Plc and Mobilezone Holding 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 mobilezone holding AG are associated (or correlated) with London Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of London Security Plc has no effect on the direction of Mobilezone Holding i.e., Mobilezone Holding and London Security go up and down completely randomly.
Pair Corralation between Mobilezone Holding and London Security
Assuming the 90 days trading horizon mobilezone holding AG is expected to generate 0.39 times more return on investment than London Security. However, mobilezone holding AG is 2.58 times less risky than London Security. It trades about 0.05 of its potential returns per unit of risk. London Security Plc is currently generating about -0.21 per unit of risk. If you would invest 1,380 in mobilezone holding AG on September 1, 2024 and sell it today you would earn a total of 12.00 from holding mobilezone holding AG or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
mobilezone holding AG vs. London Security Plc
Performance |
| Timeline |
| mobilezone holding |
| London Security Plc |
Mobilezone Holding and London Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobilezone Holding and London Security
The main advantage of trading using opposite Mobilezone Holding and London Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobilezone Holding position performs unexpectedly, London Security 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 London Security will offset losses from the drop in London Security's long position.| Mobilezone Holding vs. Uniper SE | Mobilezone Holding vs. Mulberry Group PLC | Mobilezone Holding vs. London Security Plc | Mobilezone Holding vs. Triad Group PLC |
| London Security vs. Samsung Electronics Co | London Security vs. Samsung Electronics Co | London Security vs. Hyundai Motor | London Security vs. Toyota Motor Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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