Correlation Between MEBUKI FINANCIAL and KWS SAAT

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Can any of the company-specific risk be diversified away by investing in both MEBUKI FINANCIAL and KWS SAAT 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 MEBUKI FINANCIAL and KWS SAAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEBUKI FINANCIAL GROUP and KWS SAAT SE, you can compare the effects of market volatilities on MEBUKI FINANCIAL and KWS SAAT 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 MEBUKI FINANCIAL with a short position of KWS SAAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEBUKI FINANCIAL and KWS SAAT.

Diversification Opportunities for MEBUKI FINANCIAL and KWS SAAT

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between MEBUKI and KWS is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding MEBUKI FINANCIAL GROUP and KWS SAAT SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWS SAAT SE and MEBUKI FINANCIAL 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 MEBUKI FINANCIAL GROUP are associated (or correlated) with KWS SAAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWS SAAT SE has no effect on the direction of MEBUKI FINANCIAL i.e., MEBUKI FINANCIAL and KWS SAAT go up and down completely randomly.

Pair Corralation between MEBUKI FINANCIAL and KWS SAAT

Assuming the 90 days horizon MEBUKI FINANCIAL GROUP is expected to generate 1.33 times more return on investment than KWS SAAT. However, MEBUKI FINANCIAL is 1.33 times more volatile than KWS SAAT SE. It trades about 0.08 of its potential returns per unit of risk. KWS SAAT SE is currently generating about 0.0 per unit of risk. If you would invest  200.00  in MEBUKI FINANCIAL GROUP on August 24, 2024 and sell it today you would earn a total of  194.00  from holding MEBUKI FINANCIAL GROUP or generate 97.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

MEBUKI FINANCIAL GROUP  vs.  KWS SAAT SE

 Performance 
       Timeline  
MEBUKI FINANCIAL 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in MEBUKI FINANCIAL GROUP are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MEBUKI FINANCIAL reported solid returns over the last few months and may actually be approaching a breakup point.
KWS SAAT SE 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KWS SAAT SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

MEBUKI FINANCIAL and KWS SAAT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MEBUKI FINANCIAL and KWS SAAT

The main advantage of trading using opposite MEBUKI FINANCIAL and KWS SAAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEBUKI FINANCIAL position performs unexpectedly, KWS SAAT 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 KWS SAAT will offset losses from the drop in KWS SAAT's long position.
The idea behind MEBUKI FINANCIAL GROUP and KWS SAAT SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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