Correlation Between MAHLE Metal and Cia De
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and Cia De 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 Cia De 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 Cia de Ferro, you can compare the effects of market volatilities on MAHLE Metal and Cia De 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 Cia De. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Cia De.
Diversification Opportunities for MAHLE Metal and Cia De
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MAHLE and Cia is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Cia de Ferro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cia de Ferro 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 Cia De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cia de Ferro has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and Cia De go up and down completely randomly.
Pair Corralation between MAHLE Metal and Cia De
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 1.07 times more return on investment than Cia De. However, MAHLE Metal is 1.07 times more volatile than Cia de Ferro. It trades about 0.0 of its potential returns per unit of risk. Cia de Ferro is currently generating about -0.07 per unit of risk. If you would invest 2,915 in MAHLE Metal Leve on August 27, 2024 and sell it today you would lose (121.00) from holding MAHLE Metal Leve or give up 4.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. Cia de Ferro
Performance |
| Timeline |
| MAHLE Metal Leve |
| Cia de Ferro |
MAHLE Metal and Cia De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Cia De
The main advantage of trading using opposite MAHLE Metal and Cia De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, Cia De 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 Cia De will offset losses from the drop in Cia De's long position.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| Cia De vs. Tupy SA | Cia De vs. Banco do Estado | Cia De vs. Unipar Carbocloro SA | Cia De vs. MAHLE Metal Leve |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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