Correlation Between MPM Corpreos and New Oriental
Can any of the company-specific risk be diversified away by investing in both MPM Corpreos and New Oriental 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 MPM Corpreos and New Oriental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPM Corpreos SA and New Oriental Education, you can compare the effects of market volatilities on MPM Corpreos and New Oriental 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 MPM Corpreos with a short position of New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPM Corpreos and New Oriental.
Diversification Opportunities for MPM Corpreos and New Oriental
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between MPM and New is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding MPM Corpreos SA and New Oriental Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Education and MPM Corpreos 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 MPM Corpreos SA are associated (or correlated) with New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Education has no effect on the direction of MPM Corpreos i.e., MPM Corpreos and New Oriental go up and down completely randomly.
Pair Corralation between MPM Corpreos and New Oriental
Assuming the 90 days trading horizon MPM Corpreos SA is expected to generate 0.35 times more return on investment than New Oriental. However, MPM Corpreos SA is 2.84 times less risky than New Oriental. It trades about 0.04 of its potential returns per unit of risk. New Oriental Education is currently generating about -0.22 per unit of risk. If you would invest 72.00 in MPM Corpreos SA on November 8, 2024 and sell it today you would earn a total of 1.00 from holding MPM Corpreos SA or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MPM Corpreos SA vs. New Oriental Education
Performance |
| Timeline |
| MPM Corpreos SA |
| New Oriental Education |
MPM Corpreos and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPM Corpreos and New Oriental
The main advantage of trading using opposite MPM Corpreos and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPM Corpreos position performs unexpectedly, New Oriental 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 New Oriental will offset losses from the drop in New Oriental's long position.| MPM Corpreos vs. Mliuz SA | MPM Corpreos vs. Lojas Quero Quero SA | MPM Corpreos vs. Neogrid Participaes SA | MPM Corpreos vs. Pet Center Comrcio |
| New Oriental vs. Lloyds Banking Group | New Oriental vs. Sumitomo Mitsui Financial | New Oriental vs. Ameriprise Financial | New Oriental vs. Check Point Software |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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