Correlation Between Goodbye Kansas and MTI Investment
Can any of the company-specific risk be diversified away by investing in both Goodbye Kansas 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 Goodbye Kansas and MTI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodbye Kansas Group and MTI Investment SE, you can compare the effects of market volatilities on Goodbye Kansas 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 Goodbye Kansas with a short position of MTI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodbye Kansas and MTI Investment.
Diversification Opportunities for Goodbye Kansas and MTI Investment
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goodbye and MTI is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Goodbye Kansas Group 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 Goodbye Kansas 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 Goodbye Kansas Group 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 Goodbye Kansas i.e., Goodbye Kansas and MTI Investment go up and down completely randomly.
Pair Corralation between Goodbye Kansas and MTI Investment
Assuming the 90 days trading horizon Goodbye Kansas Group is expected to generate 5.08 times more return on investment than MTI Investment. However, Goodbye Kansas is 5.08 times more volatile than MTI Investment SE. It trades about 0.09 of its potential returns per unit of risk. MTI Investment SE is currently generating about -0.07 per unit of risk. If you would invest 55.00 in Goodbye Kansas Group on September 14, 2024 and sell it today you would earn a total of 87.00 from holding Goodbye Kansas Group or generate 158.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodbye Kansas Group vs. MTI Investment SE
Performance |
| Timeline |
| Goodbye Kansas Group |
| MTI Investment SE |
Goodbye Kansas and MTI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodbye Kansas and MTI Investment
The main advantage of trading using opposite Goodbye Kansas and MTI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodbye Kansas 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.| Goodbye Kansas vs. Media and Games | Goodbye Kansas vs. Online Brands Nordic | Goodbye Kansas vs. USWE Sports AB | Goodbye Kansas vs. G5 Entertainment publ |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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