Correlation Between Flexion Mobile and MTI Investment
Can any of the company-specific risk be diversified away by investing in both Flexion Mobile and MTI Investment 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 Flexion Mobile and MTI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexion Mobile PLC and MTI Investment SE, you can compare the effects of market volatilities on Flexion Mobile and MTI Investment 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 Flexion Mobile with a short position of MTI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexion Mobile and MTI Investment.
Diversification Opportunities for Flexion Mobile and MTI Investment
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flexion and MTI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Flexion Mobile PLC and MTI Investment SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Investment SE and Flexion Mobile 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 Flexion Mobile PLC are associated (or correlated) with MTI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Investment SE has no effect on the direction of Flexion Mobile i.e., Flexion Mobile and MTI Investment go up and down completely randomly.
Pair Corralation between Flexion Mobile and MTI Investment
Assuming the 90 days trading horizon Flexion Mobile PLC is expected to generate 0.95 times more return on investment than MTI Investment. However, Flexion Mobile PLC is 1.05 times less risky than MTI Investment. It trades about -0.08 of its potential returns per unit of risk. MTI Investment SE is currently generating about -0.11 per unit of risk. If you would invest 780.00 in Flexion Mobile PLC on August 29, 2024 and sell it today you would lose (42.00) from holding Flexion Mobile PLC or give up 5.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexion Mobile PLC vs. MTI Investment SE
Performance |
| Timeline |
| Flexion Mobile PLC |
| MTI Investment SE |
Flexion Mobile and MTI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexion Mobile and MTI Investment
The main advantage of trading using opposite Flexion Mobile and MTI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexion Mobile position performs unexpectedly, MTI Investment 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 MTI Investment will offset losses from the drop in MTI Investment's long position.| Flexion Mobile vs. JLT Mobile Computers | Flexion Mobile vs. Invisio Communications AB | Flexion Mobile vs. Swedbank AB | Flexion Mobile vs. Lundin Mining |
| MTI Investment vs. Investor AB ser | MTI Investment vs. Investment AB Latour | MTI Investment vs. Industrivarden AB ser | MTI Investment vs. Tele2 AB |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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