Correlation Between MOL Hungarian and Caledonia Investments
Can any of the company-specific risk be diversified away by investing in both MOL Hungarian and Caledonia Investments 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 Caledonia Investments 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 Caledonia Investments, you can compare the effects of market volatilities on MOL Hungarian and Caledonia Investments 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 Caledonia Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOL Hungarian and Caledonia Investments.
Diversification Opportunities for MOL Hungarian and Caledonia Investments
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between MOL and Caledonia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding MOL Hungarian Oil and Caledonia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Investments 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 Caledonia Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Investments has no effect on the direction of MOL Hungarian i.e., MOL Hungarian and Caledonia Investments go up and down completely randomly.
Pair Corralation between MOL Hungarian and Caledonia Investments
If you would invest 353,000 in Caledonia Investments on October 25, 2024 and sell it today you would earn a total of 13,000 from holding Caledonia Investments or generate 3.68% 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. Caledonia Investments
Performance |
| Timeline |
| MOL Hungarian Oil |
| Caledonia Investments |
MOL Hungarian and Caledonia Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOL Hungarian and Caledonia Investments
The main advantage of trading using opposite MOL Hungarian and Caledonia Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOL Hungarian position performs unexpectedly, Caledonia Investments 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 Caledonia Investments will offset losses from the drop in Caledonia Investments' long position.| MOL Hungarian vs. Coeur Mining | MOL Hungarian vs. Invesco Physical Silver | MOL Hungarian vs. AfriTin Mining | MOL Hungarian vs. Bisichi Mining PLC |
| Caledonia Investments vs. Eastinco Mining Exploration | Caledonia Investments vs. Associated British Foods | Caledonia Investments vs. Rheinmetall AG | Caledonia Investments vs. Jacquet Metal Service |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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