Correlation Between Mutares SE and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Mutares SE and Retail Estates 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 Mutares SE and Retail Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mutares SE Co and Retail Estates NV, you can compare the effects of market volatilities on Mutares SE and Retail Estates 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 Mutares SE with a short position of Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutares SE and Retail Estates.
Diversification Opportunities for Mutares SE and Retail Estates
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mutares and Retail is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding mutares SE Co and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV and Mutares SE 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 mutares SE Co are associated (or correlated) with Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Mutares SE i.e., Mutares SE and Retail Estates go up and down completely randomly.
Pair Corralation between Mutares SE and Retail Estates
Assuming the 90 days trading horizon mutares SE Co is expected to generate 0.23 times more return on investment than Retail Estates. However, mutares SE Co is 4.38 times less risky than Retail Estates. It trades about 0.01 of its potential returns per unit of risk. Retail Estates NV is currently generating about -0.06 per unit of risk. If you would invest 2,285 in mutares SE Co on August 31, 2024 and sell it today you would earn a total of 0.00 from holding mutares SE Co or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
mutares SE Co vs. Retail Estates NV
Performance |
| Timeline |
| mutares SE |
| Retail Estates NV |
Mutares SE and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutares SE and Retail Estates
The main advantage of trading using opposite Mutares SE and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutares SE position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| Mutares SE vs. European Metals Holdings | Mutares SE vs. AMG Advanced Metallurgical | Mutares SE vs. Jacquet Metal Service | Mutares SE vs. Advanced Medical Solutions |
| Retail Estates vs. Leroy Seafood Group | Retail Estates vs. MT Bank Corp | Retail Estates vs. Virgin Wines UK | Retail Estates vs. UNIQA Insurance Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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