Correlation Between MAHLE Metal and IACInterActiveCorp
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and IACInterActiveCorp 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 IACInterActiveCorp 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 IACInterActiveCorp, you can compare the effects of market volatilities on MAHLE Metal and IACInterActiveCorp 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 IACInterActiveCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and IACInterActiveCorp.
Diversification Opportunities for MAHLE Metal and IACInterActiveCorp
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between MAHLE and IACInterActiveCorp is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and IACInterActiveCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IACInterActiveCorp 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 IACInterActiveCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IACInterActiveCorp has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and IACInterActiveCorp go up and down completely randomly.
Pair Corralation between MAHLE Metal and IACInterActiveCorp
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the IACInterActiveCorp. But the stock apears to be less risky and, when comparing its historical volatility, MAHLE Metal Leve is 2.12 times less risky than IACInterActiveCorp. The stock trades about -0.21 of its potential returns per unit of risk. The IACInterActiveCorp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,417 in IACInterActiveCorp on September 2, 2024 and sell it today you would lose (27.00) from holding IACInterActiveCorp or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. IACInterActiveCorp
Performance |
| Timeline |
| MAHLE Metal Leve |
| IACInterActiveCorp |
MAHLE Metal and IACInterActiveCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and IACInterActiveCorp
The main advantage of trading using opposite MAHLE Metal and IACInterActiveCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, IACInterActiveCorp 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 IACInterActiveCorp will offset losses from the drop in IACInterActiveCorp'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 |
| IACInterActiveCorp vs. Global X Funds | IACInterActiveCorp vs. Livetech da Bahia | IACInterActiveCorp vs. MAHLE Metal Leve | IACInterActiveCorp vs. United Rentals |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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