Correlation Between 4Mass SA and M Food
Can any of the company-specific risk be diversified away by investing in both 4Mass SA and M Food 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 4Mass SA and M Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4Mass SA and M Food SA, you can compare the effects of market volatilities on 4Mass SA and M Food 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 4Mass SA with a short position of M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4Mass SA and M Food.
Diversification Opportunities for 4Mass SA and M Food
Very good diversification
The 3 months correlation between 4Mass and MFD is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding 4Mass SA and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food SA and 4Mass SA 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 4Mass SA are associated (or correlated) with M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of 4Mass SA i.e., 4Mass SA and M Food go up and down completely randomly.
Pair Corralation between 4Mass SA and M Food
Assuming the 90 days trading horizon 4Mass SA is expected to generate 0.47 times more return on investment than M Food. However, 4Mass SA is 2.15 times less risky than M Food. It trades about -0.11 of its potential returns per unit of risk. M Food SA is currently generating about -0.43 per unit of risk. If you would invest 690.00 in 4Mass SA on September 12, 2024 and sell it today you would lose (34.00) from holding 4Mass SA or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
4Mass SA vs. M Food SA
Performance |
| Timeline |
| 4Mass SA |
| M Food SA |
4Mass SA and M Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4Mass SA and M Food
The main advantage of trading using opposite 4Mass SA and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4Mass SA position performs unexpectedly, M Food 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 M Food will offset losses from the drop in M Food's long position.| 4Mass SA vs. Echo Investment SA | 4Mass SA vs. Creotech Instruments SA | 4Mass SA vs. Noble Financials SA | 4Mass SA vs. M Food SA |
| M Food vs. Asseco Business Solutions | M Food vs. Detalion Games SA | M Food vs. Asseco South Eastern | M Food vs. HM Inwest SA |
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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