Correlation Between Bath Body and Mobly SA
Can any of the company-specific risk be diversified away by investing in both Bath Body and Mobly 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 Mobly 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 Mobly SA, you can compare the effects of market volatilities on Bath Body and Mobly 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 Mobly SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bath Body and Mobly SA.
Diversification Opportunities for Bath Body and Mobly SA
Excellent diversification
The 3 months correlation between Bath and Mobly is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bath Body Works and Mobly SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobly 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 Mobly SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobly SA has no effect on the direction of Bath Body i.e., Bath Body and Mobly SA go up and down completely randomly.
Pair Corralation between Bath Body and Mobly SA
Assuming the 90 days trading horizon Bath Body Works is expected to generate 1.08 times more return on investment than Mobly SA. However, Bath Body is 1.08 times more volatile than Mobly SA. It trades about 0.35 of its potential returns per unit of risk. Mobly SA is currently generating about -0.34 per unit of risk. If you would invest 4,532 in Bath Body Works on September 13, 2024 and sell it today you would earn a total of 1,367 from holding Bath Body Works or generate 30.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bath Body Works vs. Mobly SA
Performance |
| Timeline |
| Bath Body Works |
| Mobly SA |
Bath Body and Mobly SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bath Body and Mobly SA
The main advantage of trading using opposite Bath Body and Mobly SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bath Body position performs unexpectedly, Mobly 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 Mobly SA will offset losses from the drop in Mobly 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 |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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