Correlation Between Conrad Industries and Micromobility
Can any of the company-specific risk be diversified away by investing in both Conrad Industries and Micromobility 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 Conrad Industries and Micromobility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Conrad Industries and Micromobility, you can compare the effects of market volatilities on Conrad Industries and Micromobility 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 Conrad Industries with a short position of Micromobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conrad Industries and Micromobility.
Diversification Opportunities for Conrad Industries and Micromobility
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Conrad and Micromobility is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Conrad Industries and Micromobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micromobility and Conrad Industries 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 Conrad Industries are associated (or correlated) with Micromobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micromobility has no effect on the direction of Conrad Industries i.e., Conrad Industries and Micromobility go up and down completely randomly.
Pair Corralation between Conrad Industries and Micromobility
Given the investment horizon of 90 days Conrad Industries is expected to generate 0.26 times more return on investment than Micromobility. However, Conrad Industries is 3.86 times less risky than Micromobility. It trades about -0.06 of its potential returns per unit of risk. Micromobility is currently generating about -0.17 per unit of risk. If you would invest 1,593 in Conrad Industries on August 24, 2024 and sell it today you would lose (563.00) from holding Conrad Industries or give up 35.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.37% |
| Values | Daily Returns |
Conrad Industries vs. Micromobility
Performance |
| Timeline |
| Conrad Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Micromobility |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Conrad Industries and Micromobility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Conrad Industries and Micromobility
The main advantage of trading using opposite Conrad Industries and Micromobility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conrad Industries position performs unexpectedly, Micromobility 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 Micromobility will offset losses from the drop in Micromobility's long position.| Conrad Industries vs. Thales SA ADR | Conrad Industries vs. MTU Aero Engines | Conrad Industries vs. Safran SA | Conrad Industries vs. Leonardo SpA ADR |
| Micromobility vs. Natural Alternatives International | Micromobility vs. Vita Coco | Micromobility vs. SunOpta | Micromobility vs. SNDL Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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