Correlation Between MAHLE Metal and Mangels Industrial
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and Mangels Industrial 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 Mangels Industrial 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 Mangels Industrial SA, you can compare the effects of market volatilities on MAHLE Metal and Mangels Industrial 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 Mangels Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Mangels Industrial.
Diversification Opportunities for MAHLE Metal and Mangels Industrial
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MAHLE and Mangels is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Mangels Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangels Industrial 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 Mangels Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangels Industrial has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and Mangels Industrial go up and down completely randomly.
Pair Corralation between MAHLE Metal and Mangels Industrial
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the Mangels Industrial. But the stock apears to be less risky and, when comparing its historical volatility, MAHLE Metal Leve is 2.84 times less risky than Mangels Industrial. The stock trades about -0.08 of its potential returns per unit of risk. The Mangels Industrial SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 798.00 in Mangels Industrial SA on October 26, 2024 and sell it today you would lose (73.00) from holding Mangels Industrial SA or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. Mangels Industrial SA
Performance |
| Timeline |
| MAHLE Metal Leve |
| Mangels Industrial |
MAHLE Metal and Mangels Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Mangels Industrial
The main advantage of trading using opposite MAHLE Metal and Mangels Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, Mangels Industrial 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 Mangels Industrial will offset losses from the drop in Mangels Industrial'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 |
| Mangels Industrial vs. Txtil Renauxview SA | Mangels Industrial vs. Telecomunicaes Brasileiras SA | Mangels Industrial vs. Recrusul SA | Mangels Industrial vs. Pettenati SA Industria |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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