Correlation Between Fras Le and Mangels Industrial
Can any of the company-specific risk be diversified away by investing in both Fras Le and Mangels Industrial 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 Fras Le and Mangels Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fras le SA and Mangels Industrial SA, you can compare the effects of market volatilities on Fras Le and Mangels Industrial 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 Fras Le with a short position of Mangels Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fras Le and Mangels Industrial.
Diversification Opportunities for Fras Le and Mangels Industrial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fras and Mangels is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fras le SA and Mangels Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangels Industrial and Fras Le 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 Fras le SA are associated (or correlated) with Mangels Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangels Industrial has no effect on the direction of Fras Le i.e., Fras Le and Mangels Industrial go up and down completely randomly.
Pair Corralation between Fras Le and Mangels Industrial
Assuming the 90 days trading horizon Fras le SA is expected to generate 1.04 times more return on investment than Mangels Industrial. However, Fras Le is 1.04 times more volatile than Mangels Industrial SA. It trades about -0.26 of its potential returns per unit of risk. Mangels Industrial SA is currently generating about -0.52 per unit of risk. If you would invest 2,248 in Fras le SA on August 25, 2024 and sell it today you would lose (183.00) from holding Fras le SA or give up 8.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fras le SA vs. Mangels Industrial SA
Performance |
| Timeline |
| Fras le SA |
| Mangels Industrial |
Fras Le and Mangels Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fras Le and Mangels Industrial
The main advantage of trading using opposite Fras Le and Mangels Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fras Le position performs unexpectedly, Mangels Industrial 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 Mangels Industrial will offset losses from the drop in Mangels Industrial's long position.| Fras Le vs. Baidu Inc | Fras Le vs. Deutsche Bank Aktiengesellschaft | Fras Le vs. HSBC Holdings plc | Fras Le vs. The Bank of |
| Mangels Industrial vs. Lupatech SA | Mangels Industrial vs. Rossi Residencial SA | Mangels Industrial vs. Fras le SA | Mangels Industrial vs. Clave Indices De |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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