Correlation Between COMMERCIAL VEHICLE and Martifer SGPS
Can any of the company-specific risk be diversified away by investing in both COMMERCIAL VEHICLE and Martifer SGPS 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 COMMERCIAL VEHICLE and Martifer SGPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMMERCIAL VEHICLE and Martifer SGPS SA, you can compare the effects of market volatilities on COMMERCIAL VEHICLE and Martifer SGPS 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 COMMERCIAL VEHICLE with a short position of Martifer SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMERCIAL VEHICLE and Martifer SGPS.
Diversification Opportunities for COMMERCIAL VEHICLE and Martifer SGPS
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COMMERCIAL and Martifer is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding COMMERCIAL VEHICLE and Martifer SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martifer SGPS SA and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE are associated (or correlated) with Martifer SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martifer SGPS SA has no effect on the direction of COMMERCIAL VEHICLE i.e., COMMERCIAL VEHICLE and Martifer SGPS go up and down completely randomly.
Pair Corralation between COMMERCIAL VEHICLE and Martifer SGPS
Assuming the 90 days trading horizon COMMERCIAL VEHICLE is expected to under-perform the Martifer SGPS. In addition to that, COMMERCIAL VEHICLE is 3.14 times more volatile than Martifer SGPS SA. It trades about -0.11 of its total potential returns per unit of risk. Martifer SGPS SA is currently generating about 0.06 per unit of volatility. If you would invest 155.00 in Martifer SGPS SA on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Martifer SGPS SA or generate 10.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMMERCIAL VEHICLE vs. Martifer SGPS SA
Performance |
| Timeline |
| COMMERCIAL VEHICLE |
| Martifer SGPS SA |
COMMERCIAL VEHICLE and Martifer SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMMERCIAL VEHICLE and Martifer SGPS
The main advantage of trading using opposite COMMERCIAL VEHICLE and Martifer SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMERCIAL VEHICLE position performs unexpectedly, Martifer SGPS 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 Martifer SGPS will offset losses from the drop in Martifer SGPS's long position.| COMMERCIAL VEHICLE vs. Apple Inc | COMMERCIAL VEHICLE vs. Apple Inc | COMMERCIAL VEHICLE vs. Apple Inc | COMMERCIAL VEHICLE vs. Apple Inc |
| Martifer SGPS vs. Molson Coors Beverage | Martifer SGPS vs. SIMS METAL MGT | Martifer SGPS vs. CarsalesCom | Martifer SGPS vs. Fevertree Drinks PLC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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