Correlation Between CoStar and MAHLE Metal
Can any of the company-specific risk be diversified away by investing in both CoStar and MAHLE Metal 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 CoStar and MAHLE Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CoStar Group and MAHLE Metal Leve, you can compare the effects of market volatilities on CoStar and MAHLE Metal 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 CoStar with a short position of MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoStar and MAHLE Metal.
Diversification Opportunities for CoStar and MAHLE Metal
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CoStar and MAHLE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CoStar Group and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve and CoStar 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 CoStar Group are associated (or correlated) with MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of CoStar i.e., CoStar and MAHLE Metal go up and down completely randomly.
Pair Corralation between CoStar and MAHLE Metal
Assuming the 90 days trading horizon CoStar Group is expected to generate 1.25 times more return on investment than MAHLE Metal. However, CoStar is 1.25 times more volatile than MAHLE Metal Leve. It trades about 0.3 of its potential returns per unit of risk. MAHLE Metal Leve is currently generating about -0.21 per unit of risk. If you would invest 424.00 in CoStar Group on September 2, 2024 and sell it today you would earn a total of 62.00 from holding CoStar Group or generate 14.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CoStar Group vs. MAHLE Metal Leve
Performance |
| Timeline |
| CoStar Group |
| MAHLE Metal Leve |
CoStar and MAHLE Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CoStar and MAHLE Metal
The main advantage of trading using opposite CoStar and MAHLE Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoStar position performs unexpectedly, MAHLE Metal 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 MAHLE Metal will offset losses from the drop in MAHLE Metal's long position.| CoStar vs. NXP Semiconductors NV | CoStar vs. Autohome | CoStar vs. Multilaser Industrial SA | CoStar vs. United Rentals |
| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |