Correlation Between MOBILE FACTORY and REVO INSURANCE
Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY and REVO INSURANCE 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 MOBILE FACTORY and REVO INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOBILE FACTORY INC and REVO INSURANCE SPA, you can compare the effects of market volatilities on MOBILE FACTORY and REVO INSURANCE 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 MOBILE FACTORY with a short position of REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and REVO INSURANCE.
Diversification Opportunities for MOBILE FACTORY and REVO INSURANCE
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOBILE and REVO is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA and MOBILE FACTORY 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 MOBILE FACTORY INC are associated (or correlated) with REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of MOBILE FACTORY i.e., MOBILE FACTORY and REVO INSURANCE go up and down completely randomly.
Pair Corralation between MOBILE FACTORY and REVO INSURANCE
Assuming the 90 days horizon MOBILE FACTORY INC is expected to generate 0.27 times more return on investment than REVO INSURANCE. However, MOBILE FACTORY INC is 3.67 times less risky than REVO INSURANCE. It trades about 0.1 of its potential returns per unit of risk. REVO INSURANCE SPA is currently generating about -0.07 per unit of risk. If you would invest 550.00 in MOBILE FACTORY INC on October 19, 2024 and sell it today you would earn a total of 10.00 from holding MOBILE FACTORY INC or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOBILE FACTORY INC vs. REVO INSURANCE SPA
Performance |
| Timeline |
| MOBILE FACTORY INC |
| REVO INSURANCE SPA |
MOBILE FACTORY and REVO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOBILE FACTORY and REVO INSURANCE
The main advantage of trading using opposite MOBILE FACTORY and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOBILE FACTORY position performs unexpectedly, REVO INSURANCE 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 REVO INSURANCE will offset losses from the drop in REVO INSURANCE's long position.| MOBILE FACTORY vs. Chuangs China Investments | MOBILE FACTORY vs. CANON MARKETING JP | MOBILE FACTORY vs. Scottish Mortgage Investment | MOBILE FACTORY vs. Keck Seng Investments |
| REVO INSURANCE vs. Zoom Video Communications | REVO INSURANCE vs. Ribbon Communications | REVO INSURANCE vs. MEDICAL FACILITIES NEW | REVO INSURANCE vs. MOBILE FACTORY INC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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