Correlation Between Birks and Mene
Can any of the company-specific risk be diversified away by investing in both Birks and Mene 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 Birks and Mene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birks Group and Mene Inc, you can compare the effects of market volatilities on Birks and Mene 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 Birks with a short position of Mene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birks and Mene.
Diversification Opportunities for Birks and Mene
Very good diversification
The 3 months correlation between Birks and Mene is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Birks Group and Mene Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mene Inc and Birks 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 Birks Group are associated (or correlated) with Mene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mene Inc has no effect on the direction of Birks i.e., Birks and Mene go up and down completely randomly.
Pair Corralation between Birks and Mene
Considering the 90-day investment horizon Birks Group is expected to generate 0.62 times more return on investment than Mene. However, Birks Group is 1.62 times less risky than Mene. It trades about 0.13 of its potential returns per unit of risk. Mene Inc is currently generating about 0.01 per unit of risk. If you would invest 160.00 in Birks Group on November 3, 2024 and sell it today you would earn a total of 17.00 from holding Birks Group or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Birks Group vs. Mene Inc
Performance |
| Timeline |
| Birks Group |
| Mene Inc |
Birks and Mene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birks and Mene
The main advantage of trading using opposite Birks and Mene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birks position performs unexpectedly, Mene 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 Mene will offset losses from the drop in Mene's long position.The idea behind Birks Group and Mene Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mene vs. Lanvin Group Holdings | Mene vs. MYT Netherlands Parent | Mene vs. Movado Group | Mene vs. Birks Group |
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 Stocks Directory module to find actively traded stocks across global markets.
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