Correlation Between Datalogic SpA and Mühlbauer Holding
Can any of the company-specific risk be diversified away by investing in both Datalogic SpA and Mühlbauer Holding 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 Datalogic SpA and Mühlbauer Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datalogic SpA and Mhlbauer Holding AG, you can compare the effects of market volatilities on Datalogic SpA and Mühlbauer Holding 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 Datalogic SpA with a short position of Mühlbauer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datalogic SpA and Mühlbauer Holding.
Diversification Opportunities for Datalogic SpA and Mühlbauer Holding
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Datalogic and Mühlbauer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Datalogic SpA and Mhlbauer Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mühlbauer Holding and Datalogic SpA 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 Datalogic SpA are associated (or correlated) with Mühlbauer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mühlbauer Holding has no effect on the direction of Datalogic SpA i.e., Datalogic SpA and Mühlbauer Holding go up and down completely randomly.
Pair Corralation between Datalogic SpA and Mühlbauer Holding
Assuming the 90 days trading horizon Datalogic SpA is expected to under-perform the Mühlbauer Holding. But the stock apears to be less risky and, when comparing its historical volatility, Datalogic SpA is 1.22 times less risky than Mühlbauer Holding. The stock trades about -0.41 of its potential returns per unit of risk. The Mhlbauer Holding AG is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 4,140 in Mhlbauer Holding AG on September 1, 2024 and sell it today you would lose (380.00) from holding Mhlbauer Holding AG or give up 9.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Datalogic SpA vs. Mhlbauer Holding AG
Performance |
| Timeline |
| Datalogic SpA |
| Mühlbauer Holding |
Datalogic SpA and Mühlbauer Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datalogic SpA and Mühlbauer Holding
The main advantage of trading using opposite Datalogic SpA and Mühlbauer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datalogic SpA position performs unexpectedly, Mühlbauer Holding 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 Mühlbauer Holding will offset losses from the drop in Mühlbauer Holding's long position.| Datalogic SpA vs. Strategic Education | Datalogic SpA vs. STRAYER EDUCATION | Datalogic SpA vs. CHINA EDUCATION GROUP | Datalogic SpA vs. American Public Education |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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