Correlation Between ALL ENERGY and Mena Transport
Can any of the company-specific risk be diversified away by investing in both ALL ENERGY and Mena Transport 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 ALL ENERGY and Mena Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALL ENERGY UTILITIES and Mena Transport Public, you can compare the effects of market volatilities on ALL ENERGY and Mena Transport 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 ALL ENERGY with a short position of Mena Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALL ENERGY and Mena Transport.
Diversification Opportunities for ALL ENERGY and Mena Transport
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ALL and Mena is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ALL ENERGY UTILITIES and Mena Transport Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mena Transport Public and ALL ENERGY 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 ALL ENERGY UTILITIES are associated (or correlated) with Mena Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mena Transport Public has no effect on the direction of ALL ENERGY i.e., ALL ENERGY and Mena Transport go up and down completely randomly.
Pair Corralation between ALL ENERGY and Mena Transport
Assuming the 90 days horizon ALL ENERGY UTILITIES is expected to under-perform the Mena Transport. In addition to that, ALL ENERGY is 1.07 times more volatile than Mena Transport Public. It trades about -0.07 of its total potential returns per unit of risk. Mena Transport Public is currently generating about -0.01 per unit of volatility. If you would invest 176.00 in Mena Transport Public on August 31, 2024 and sell it today you would lose (54.00) from holding Mena Transport Public or give up 30.68% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.78% |
Values | Daily Returns |
ALL ENERGY UTILITIES vs. Mena Transport Public
Performance |
Timeline |
ALL ENERGY UTILITIES |
Mena Transport Public |
ALL ENERGY and Mena Transport Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ALL ENERGY and Mena Transport
The main advantage of trading using opposite ALL ENERGY and Mena Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALL ENERGY position performs unexpectedly, Mena Transport 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 Mena Transport will offset losses from the drop in Mena Transport's long position.ALL ENERGY vs. AP Public | ALL ENERGY vs. TRC Construction Public | ALL ENERGY vs. Bangkok Expressway and | ALL ENERGY vs. Lohakit Metal Public |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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