Correlation Between MAHLE Metal and NEXG11
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and NEXG11 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 NEXG11 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 NEXG11, you can compare the effects of market volatilities on MAHLE Metal and NEXG11 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 NEXG11. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and NEXG11.
Diversification Opportunities for MAHLE Metal and NEXG11
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MAHLE and NEXG11 is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and NEXG11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXG11 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 NEXG11. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXG11 has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and NEXG11 go up and down completely randomly.
Pair Corralation between MAHLE Metal and NEXG11
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the NEXG11. In addition to that, MAHLE Metal is 3.03 times more volatile than NEXG11. It trades about -0.07 of its total potential returns per unit of risk. NEXG11 is currently generating about 0.49 per unit of volatility. If you would invest 11,844 in NEXG11 on September 20, 2024 and sell it today you would earn a total of 756.00 from holding NEXG11 or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. NEXG11
Performance |
| Timeline |
| MAHLE Metal Leve |
| NEXG11 |
MAHLE Metal and NEXG11 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and NEXG11
The main advantage of trading using opposite MAHLE Metal and NEXG11 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, NEXG11 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 NEXG11 will offset losses from the drop in NEXG11'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 |
| NEXG11 vs. Brpr Corporate Offices | NEXG11 vs. Telecomunicaes Brasileiras SA | NEXG11 vs. Multilaser Industrial SA | NEXG11 vs. Ross Stores |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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