Correlation Between MAHLE Metal and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and ConocoPhillips 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 MAHLE Metal and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and ConocoPhillips, you can compare the effects of market volatilities on MAHLE Metal and ConocoPhillips 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 MAHLE Metal with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and ConocoPhillips.
Diversification Opportunities for MAHLE Metal and ConocoPhillips
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAHLE and ConocoPhillips is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and MAHLE Metal 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 MAHLE Metal Leve are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and ConocoPhillips go up and down completely randomly.
Pair Corralation between MAHLE Metal and ConocoPhillips
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the ConocoPhillips. But the stock apears to be less risky and, when comparing its historical volatility, MAHLE Metal Leve is 1.03 times less risky than ConocoPhillips. The stock trades about -0.06 of its potential returns per unit of risk. The ConocoPhillips is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,537 in ConocoPhillips on September 1, 2024 and sell it today you would earn a total of 896.00 from holding ConocoPhillips or generate 19.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
MAHLE Metal Leve vs. ConocoPhillips
Performance |
| Timeline |
| MAHLE Metal Leve |
| ConocoPhillips |
MAHLE Metal and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and ConocoPhillips
The main advantage of trading using opposite MAHLE Metal and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Fras le SA | MAHLE Metal vs. Energisa SA | MAHLE Metal vs. Clave Indices De |
| ConocoPhillips vs. Petro Rio SA | ConocoPhillips vs. Banco BTG Pactual | ConocoPhillips vs. Ambipar Participaes e | ConocoPhillips vs. Mliuz SA |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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