Correlation Between MIE HOLDINGS and Goodyear Tire
Can any of the company-specific risk be diversified away by investing in both MIE HOLDINGS and Goodyear Tire 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 MIE HOLDINGS and Goodyear Tire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIE HOLDINGS and Goodyear Tire Rubber, you can compare the effects of market volatilities on MIE HOLDINGS and Goodyear Tire 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 MIE HOLDINGS with a short position of Goodyear Tire. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIE HOLDINGS and Goodyear Tire.
Diversification Opportunities for MIE HOLDINGS and Goodyear Tire
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between MIE and Goodyear is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding MIE HOLDINGS and Goodyear Tire Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodyear Tire Rubber and MIE HOLDINGS 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 MIE HOLDINGS are associated (or correlated) with Goodyear Tire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodyear Tire Rubber has no effect on the direction of MIE HOLDINGS i.e., MIE HOLDINGS and Goodyear Tire go up and down completely randomly.
Pair Corralation between MIE HOLDINGS and Goodyear Tire
Assuming the 90 days trading horizon MIE HOLDINGS is expected to generate 24.19 times more return on investment than Goodyear Tire. However, MIE HOLDINGS is 24.19 times more volatile than Goodyear Tire Rubber. It trades about 0.07 of its potential returns per unit of risk. Goodyear Tire Rubber is currently generating about 0.02 per unit of risk. If you would invest 0.05 in MIE HOLDINGS on September 4, 2024 and sell it today you would earn a total of 0.00 from holding MIE HOLDINGS or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
MIE HOLDINGS vs. Goodyear Tire Rubber
Performance |
| Timeline |
| MIE HOLDINGS |
| Goodyear Tire Rubber |
MIE HOLDINGS and Goodyear Tire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIE HOLDINGS and Goodyear Tire
The main advantage of trading using opposite MIE HOLDINGS and Goodyear Tire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIE HOLDINGS position performs unexpectedly, Goodyear Tire 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 Goodyear Tire will offset losses from the drop in Goodyear Tire's long position.| MIE HOLDINGS vs. TOTAL GABON | MIE HOLDINGS vs. Walgreens Boots Alliance | MIE HOLDINGS vs. Peak Resources Limited |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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