Correlation Between Agroliga Group and MBank SA
Can any of the company-specific risk be diversified away by investing in both Agroliga Group and MBank SA 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 Agroliga Group and MBank SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agroliga Group PLC and mBank SA, you can compare the effects of market volatilities on Agroliga Group and MBank SA 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 Agroliga Group with a short position of MBank SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agroliga Group and MBank SA.
Diversification Opportunities for Agroliga Group and MBank SA
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agroliga and MBank is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Agroliga Group PLC and mBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mBank SA and Agroliga Group 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 Agroliga Group PLC are associated (or correlated) with MBank SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mBank SA has no effect on the direction of Agroliga Group i.e., Agroliga Group and MBank SA go up and down completely randomly.
Pair Corralation between Agroliga Group and MBank SA
Assuming the 90 days trading horizon Agroliga Group PLC is expected to generate 0.93 times more return on investment than MBank SA. However, Agroliga Group PLC is 1.08 times less risky than MBank SA. It trades about 0.1 of its potential returns per unit of risk. mBank SA is currently generating about -0.09 per unit of risk. If you would invest 1,820 in Agroliga Group PLC on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Agroliga Group PLC or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Agroliga Group PLC vs. mBank SA
Performance |
| Timeline |
| Agroliga Group PLC |
| mBank SA |
Agroliga Group and MBank SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agroliga Group and MBank SA
The main advantage of trading using opposite Agroliga Group and MBank SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agroliga Group position performs unexpectedly, MBank SA 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 MBank SA will offset losses from the drop in MBank SA's long position.| Agroliga Group vs. mBank SA | Agroliga Group vs. Noble Financials SA | Agroliga Group vs. UniCredit SpA | Agroliga Group vs. GreenX Metals |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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