Correlation Between MOL Hungarian and BSF Enterprise
Can any of the company-specific risk be diversified away by investing in both MOL Hungarian and BSF Enterprise 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 MOL Hungarian and BSF Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOL Hungarian Oil and BSF Enterprise Plc, you can compare the effects of market volatilities on MOL Hungarian and BSF Enterprise 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 MOL Hungarian with a short position of BSF Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOL Hungarian and BSF Enterprise.
Diversification Opportunities for MOL Hungarian and BSF Enterprise
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between MOL and BSF is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding MOL Hungarian Oil and BSF Enterprise Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSF Enterprise Plc and MOL Hungarian 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 MOL Hungarian Oil are associated (or correlated) with BSF Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSF Enterprise Plc has no effect on the direction of MOL Hungarian i.e., MOL Hungarian and BSF Enterprise go up and down completely randomly.
Pair Corralation between MOL Hungarian and BSF Enterprise
Assuming the 90 days trading horizon MOL Hungarian Oil is expected to generate 0.5 times more return on investment than BSF Enterprise. However, MOL Hungarian Oil is 2.02 times less risky than BSF Enterprise. It trades about 0.01 of its potential returns per unit of risk. BSF Enterprise Plc is currently generating about -0.1 per unit of risk. If you would invest 292,200 in MOL Hungarian Oil on September 2, 2024 and sell it today you would earn a total of 0.00 from holding MOL Hungarian Oil or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOL Hungarian Oil vs. BSF Enterprise Plc
Performance |
| Timeline |
| MOL Hungarian Oil |
| BSF Enterprise Plc |
MOL Hungarian and BSF Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOL Hungarian and BSF Enterprise
The main advantage of trading using opposite MOL Hungarian and BSF Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOL Hungarian position performs unexpectedly, BSF Enterprise 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 BSF Enterprise will offset losses from the drop in BSF Enterprise's long position.| MOL Hungarian vs. Edita Food Industries | MOL Hungarian vs. New Residential Investment | MOL Hungarian vs. Roebuck Food Group | MOL Hungarian vs. Beeks Trading |
| BSF Enterprise vs. Samsung Electronics Co | BSF Enterprise vs. Samsung Electronics Co | BSF Enterprise vs. Hyundai Motor | BSF Enterprise 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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