Correlation Between Biztech Konsulting and MBank SA
Can any of the company-specific risk be diversified away by investing in both Biztech Konsulting 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 Biztech Konsulting and MBank SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biztech Konsulting SA and mBank SA, you can compare the effects of market volatilities on Biztech Konsulting 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 Biztech Konsulting with a short position of MBank SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biztech Konsulting and MBank SA.
Diversification Opportunities for Biztech Konsulting and MBank SA
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Biztech and MBank is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Biztech Konsulting SA and mBank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mBank SA and Biztech Konsulting 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 Biztech Konsulting SA 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 Biztech Konsulting i.e., Biztech Konsulting and MBank SA go up and down completely randomly.
Pair Corralation between Biztech Konsulting and MBank SA
Assuming the 90 days trading horizon Biztech Konsulting SA is expected to under-perform the MBank SA. In addition to that, Biztech Konsulting is 2.4 times more volatile than mBank SA. It trades about -0.08 of its total potential returns per unit of risk. mBank SA is currently generating about 0.45 per unit of volatility. If you would invest 59,800 in mBank SA on November 28, 2024 and sell it today you would earn a total of 13,300 from holding mBank SA or generate 22.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biztech Konsulting SA vs. mBank SA
Performance |
| Timeline |
| Biztech Konsulting |
| mBank SA |
Biztech Konsulting and MBank SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biztech Konsulting and MBank SA
The main advantage of trading using opposite Biztech Konsulting and MBank SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biztech Konsulting 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.| Biztech Konsulting vs. Clean Carbon Energy | Biztech Konsulting vs. ADX | Biztech Konsulting vs. Agroliga Group PLC | Biztech Konsulting vs. Vee SA |
| MBank SA vs. Road Studio SA | MBank SA vs. Noble Financials SA | MBank SA vs. LSI Software SA | MBank SA 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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