Correlation Between MAHLE Metal and CM Hospitalar
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and CM Hospitalar 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 CM Hospitalar 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 CM Hospitalar SA, you can compare the effects of market volatilities on MAHLE Metal and CM Hospitalar 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 CM Hospitalar. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and CM Hospitalar.
Diversification Opportunities for MAHLE Metal and CM Hospitalar
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between MAHLE and VVEO3 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and CM Hospitalar SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CM Hospitalar SA 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 CM Hospitalar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CM Hospitalar SA has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and CM Hospitalar go up and down completely randomly.
Pair Corralation between MAHLE Metal and CM Hospitalar
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 0.62 times more return on investment than CM Hospitalar. However, MAHLE Metal Leve is 1.61 times less risky than CM Hospitalar. It trades about 0.0 of its potential returns per unit of risk. CM Hospitalar SA is currently generating about -0.13 per unit of risk. If you would invest 3,205 in MAHLE Metal Leve on September 2, 2024 and sell it today you would lose (492.00) from holding MAHLE Metal Leve or give up 15.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. CM Hospitalar SA
Performance |
| Timeline |
| MAHLE Metal Leve |
| CM Hospitalar SA |
MAHLE Metal and CM Hospitalar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and CM Hospitalar
The main advantage of trading using opposite MAHLE Metal and CM Hospitalar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, CM Hospitalar 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 CM Hospitalar will offset losses from the drop in CM Hospitalar'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 |
| CM Hospitalar vs. Profarma Distribuidora de | CM Hospitalar vs. Fras le SA | CM Hospitalar vs. Western Digital | CM Hospitalar vs. Energisa SA |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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