Correlation Between MAHLE Metal and Basic Materials
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and Basic Materials 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 Basic Materials 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 Basic Materials, you can compare the effects of market volatilities on MAHLE Metal and Basic Materials 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 Basic Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Basic Materials.
Diversification Opportunities for MAHLE Metal and Basic Materials
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAHLE and Basic is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Basic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Materials 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 Basic Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Materials has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and Basic Materials go up and down completely randomly.
Pair Corralation between MAHLE Metal and Basic Materials
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 2.71 times more return on investment than Basic Materials. However, MAHLE Metal is 2.71 times more volatile than Basic Materials. It trades about 0.04 of its potential returns per unit of risk. Basic Materials is currently generating about 0.01 per unit of risk. If you would invest 1,860 in MAHLE Metal Leve on September 5, 2024 and sell it today you would earn a total of 785.00 from holding MAHLE Metal Leve or generate 42.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. Basic Materials
Performance |
| Timeline |
MAHLE Metal and Basic Materials Volatility Contrast
Predicted Return Density |
| Returns |
MAHLE Metal Leve
Pair trading matchups for MAHLE Metal
Basic Materials
Pair trading matchups for Basic Materials
Pair Trading with MAHLE Metal and Basic Materials
The main advantage of trading using opposite MAHLE Metal and Basic Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, Basic Materials 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 Basic Materials will offset losses from the drop in Basic Materials' long position.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| Basic Materials vs. Costco Wholesale | Basic Materials vs. Paycom Software | Basic Materials vs. American Airlines Group | Basic Materials vs. UnitedHealth Group Incorporated |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |