Correlation Between MAHLE Metal and G2D Investments
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and G2D Investments 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 G2D Investments 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 G2D Investments, you can compare the effects of market volatilities on MAHLE Metal and G2D Investments 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 G2D Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and G2D Investments.
Diversification Opportunities for MAHLE Metal and G2D Investments
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MAHLE and G2D is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and G2D Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G2D Investments 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 G2D Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G2D Investments has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and G2D Investments go up and down completely randomly.
Pair Corralation between MAHLE Metal and G2D Investments
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 0.84 times more return on investment than G2D Investments. However, MAHLE Metal Leve is 1.19 times less risky than G2D Investments. It trades about 0.1 of its potential returns per unit of risk. G2D Investments is currently generating about 0.0 per unit of risk. If you would invest 2,729 in MAHLE Metal Leve on November 18, 2024 and sell it today you would earn a total of 90.00 from holding MAHLE Metal Leve or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. G2D Investments
Performance |
| Timeline |
| MAHLE Metal Leve |
| G2D Investments |
MAHLE Metal and G2D Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and G2D Investments
The main advantage of trading using opposite MAHLE Metal and G2D Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, G2D Investments 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 G2D Investments will offset losses from the drop in G2D Investments' long position.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| G2D Investments vs. Pure Storage, | G2D Investments vs. MAHLE Metal Leve | G2D Investments vs. United Airlines Holdings | G2D Investments vs. NXP Semiconductors NV |
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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