Correlation Between Bath Body and Mliuz SA
Can any of the company-specific risk be diversified away by investing in both Bath Body and Mliuz 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 Bath Body and Mliuz SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bath Body Works and Mliuz SA, you can compare the effects of market volatilities on Bath Body and Mliuz 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 Bath Body with a short position of Mliuz SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bath Body and Mliuz SA.
Diversification Opportunities for Bath Body and Mliuz SA
Excellent diversification
The 3 months correlation between Bath and Mliuz is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bath Body Works and Mliuz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mliuz SA and Bath Body 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 Bath Body Works are associated (or correlated) with Mliuz SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mliuz SA has no effect on the direction of Bath Body i.e., Bath Body and Mliuz SA go up and down completely randomly.
Pair Corralation between Bath Body and Mliuz SA
Assuming the 90 days trading horizon Bath Body is expected to generate 3.37 times less return on investment than Mliuz SA. But when comparing it to its historical volatility, Bath Body Works is 2.33 times less risky than Mliuz SA. It trades about 0.02 of its potential returns per unit of risk. Mliuz SA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 355.00 in Mliuz SA on September 14, 2024 and sell it today you would lose (52.00) from holding Mliuz SA or give up 14.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 61.2% |
| Values | Daily Returns |
Bath Body Works vs. Mliuz SA
Performance |
| Timeline |
| Bath Body Works |
| Mliuz SA |
Bath Body and Mliuz SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bath Body and Mliuz SA
The main advantage of trading using opposite Bath Body and Mliuz SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bath Body position performs unexpectedly, Mliuz 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 Mliuz SA will offset losses from the drop in Mliuz SA's long position.| Bath Body vs. Mliuz SA | Bath Body vs. Natura Co Holding | Bath Body vs. Rede DOr So | Bath Body vs. Locaweb Servios de |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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