Correlation Between MAHLE Metal and Wix
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal and Wix 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 Wix 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 Wix, you can compare the effects of market volatilities on MAHLE Metal and Wix 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 Wix. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Wix.
Diversification Opportunities for MAHLE Metal and Wix
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MAHLE and Wix is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Wix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wix 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 Wix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wix has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and Wix go up and down completely randomly.
Pair Corralation between MAHLE Metal and Wix
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the Wix. But the stock apears to be less risky and, when comparing its historical volatility, MAHLE Metal Leve is 2.86 times less risky than Wix. The stock trades about -0.21 of its potential returns per unit of risk. The Wix is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,225 in Wix on August 31, 2024 and sell it today you would earn a total of 1,283 from holding Wix or generate 39.78% 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. Wix
Performance |
| Timeline |
| MAHLE Metal Leve |
| Wix |
MAHLE Metal and Wix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Wix
The main advantage of trading using opposite MAHLE Metal and Wix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal position performs unexpectedly, Wix 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 Wix will offset losses from the drop in Wix's long position.| MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Fras le SA | MAHLE Metal vs. Energisa SA | MAHLE Metal vs. Clave Indices De |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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