Correlation Between Maha Energy and SpectraCure
Can any of the company-specific risk be diversified away by investing in both Maha Energy and SpectraCure 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 Maha Energy and SpectraCure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maha Energy AB and SpectraCure AB, you can compare the effects of market volatilities on Maha Energy and SpectraCure 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 Maha Energy with a short position of SpectraCure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maha Energy and SpectraCure.
Diversification Opportunities for Maha Energy and SpectraCure
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maha and SpectraCure is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Maha Energy AB and SpectraCure AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SpectraCure AB and Maha Energy 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 Maha Energy AB are associated (or correlated) with SpectraCure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SpectraCure AB has no effect on the direction of Maha Energy i.e., Maha Energy and SpectraCure go up and down completely randomly.
Pair Corralation between Maha Energy and SpectraCure
Assuming the 90 days trading horizon Maha Energy AB is expected to generate 0.24 times more return on investment than SpectraCure. However, Maha Energy AB is 4.25 times less risky than SpectraCure. It trades about 0.38 of its potential returns per unit of risk. SpectraCure AB is currently generating about -0.05 per unit of risk. If you would invest 607.00 in Maha Energy AB on September 1, 2024 and sell it today you would earn a total of 95.00 from holding Maha Energy AB or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maha Energy AB vs. SpectraCure AB
Performance |
| Timeline |
| Maha Energy AB |
| SpectraCure AB |
Maha Energy and SpectraCure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maha Energy and SpectraCure
The main advantage of trading using opposite Maha Energy and SpectraCure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maha Energy position performs unexpectedly, SpectraCure 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 SpectraCure will offset losses from the drop in SpectraCure's long position.| Maha Energy vs. GomSpace Group AB | Maha Energy vs. SaltX Technology Holding | Maha Energy vs. Ambu AS | Maha Energy vs. Fingerprint Cards AB |
| SpectraCure vs. Maha Energy AB | SpectraCure vs. Saniona AB | SpectraCure vs. Kancera AB | SpectraCure vs. SolTech Energy Sweden |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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