Correlation Between Esotiq Henderson and M Food
Can any of the company-specific risk be diversified away by investing in both Esotiq Henderson and M Food 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 Esotiq Henderson and M Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esotiq Henderson SA and M Food SA, you can compare the effects of market volatilities on Esotiq Henderson and M Food 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 Esotiq Henderson with a short position of M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esotiq Henderson and M Food.
Diversification Opportunities for Esotiq Henderson and M Food
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Esotiq and MFD is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Esotiq Henderson SA and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food SA and Esotiq Henderson 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 Esotiq Henderson SA are associated (or correlated) with M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of Esotiq Henderson i.e., Esotiq Henderson and M Food go up and down completely randomly.
Pair Corralation between Esotiq Henderson and M Food
Assuming the 90 days trading horizon Esotiq Henderson SA is expected to generate 0.43 times more return on investment than M Food. However, Esotiq Henderson SA is 2.32 times less risky than M Food. It trades about 0.04 of its potential returns per unit of risk. M Food SA is currently generating about -0.05 per unit of risk. If you would invest 2,847 in Esotiq Henderson SA on September 3, 2024 and sell it today you would earn a total of 1,033 from holding Esotiq Henderson SA or generate 36.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.11% |
| Values | Daily Returns |
Esotiq Henderson SA vs. M Food SA
Performance |
| Timeline |
| Esotiq Henderson |
| M Food SA |
Esotiq Henderson and M Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esotiq Henderson and M Food
The main advantage of trading using opposite Esotiq Henderson and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esotiq Henderson position performs unexpectedly, M Food 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 M Food will offset losses from the drop in M Food's long position.| Esotiq Henderson vs. BNP Paribas Bank | Esotiq Henderson vs. SOFTWARE MANSION SPOLKA | Esotiq Henderson vs. Echo Investment SA | Esotiq Henderson vs. Alior Bank SA |
| M Food vs. Asseco Business Solutions | M Food vs. Detalion Games SA | M Food vs. Kogeneracja SA | M Food vs. Asseco South Eastern |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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