Correlation Between Mauna Kea and AbL Diagnostics
Can any of the company-specific risk be diversified away by investing in both Mauna Kea and AbL Diagnostics 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 Mauna Kea and AbL Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mauna Kea Technologies and AbL Diagnostics SA, you can compare the effects of market volatilities on Mauna Kea and AbL Diagnostics 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 Mauna Kea with a short position of AbL Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mauna Kea and AbL Diagnostics.
Diversification Opportunities for Mauna Kea and AbL Diagnostics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mauna and AbL is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mauna Kea Technologies and AbL Diagnostics SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbL Diagnostics SA and Mauna Kea 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 Mauna Kea Technologies are associated (or correlated) with AbL Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbL Diagnostics SA has no effect on the direction of Mauna Kea i.e., Mauna Kea and AbL Diagnostics go up and down completely randomly.
Pair Corralation between Mauna Kea and AbL Diagnostics
Assuming the 90 days trading horizon Mauna Kea Technologies is expected to generate 0.88 times more return on investment than AbL Diagnostics. However, Mauna Kea Technologies is 1.13 times less risky than AbL Diagnostics. It trades about -0.03 of its potential returns per unit of risk. AbL Diagnostics SA is currently generating about -0.05 per unit of risk. If you would invest 45.00 in Mauna Kea Technologies on August 27, 2024 and sell it today you would lose (28.00) from holding Mauna Kea Technologies or give up 62.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.46% |
| Values | Daily Returns |
Mauna Kea Technologies vs. AbL Diagnostics SA
Performance |
| Timeline |
| Mauna Kea Technologies |
| AbL Diagnostics SA |
Mauna Kea and AbL Diagnostics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mauna Kea and AbL Diagnostics
The main advantage of trading using opposite Mauna Kea and AbL Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mauna Kea position performs unexpectedly, AbL Diagnostics 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 AbL Diagnostics will offset losses from the drop in AbL Diagnostics' long position.| Mauna Kea vs. LVMH Mot Hennessy | Mauna Kea vs. LOreal SA | Mauna Kea vs. Hermes International SCA | Mauna Kea vs. Manitou BF SA |
| AbL Diagnostics vs. Bilendi | AbL Diagnostics vs. Mediantechn | AbL Diagnostics vs. CMG Cleantech SA | AbL Diagnostics vs. Mauna Kea Technologies |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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