Correlation Between Matas AS and Pandora AS
Can any of the company-specific risk be diversified away by investing in both Matas AS and Pandora AS 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 Matas AS and Pandora AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matas AS and Pandora AS, you can compare the effects of market volatilities on Matas AS and Pandora AS 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 Matas AS with a short position of Pandora AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matas AS and Pandora AS.
Diversification Opportunities for Matas AS and Pandora AS
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matas and Pandora is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Matas AS and Pandora AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pandora AS and Matas AS 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 Matas AS are associated (or correlated) with Pandora AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pandora AS has no effect on the direction of Matas AS i.e., Matas AS and Pandora AS go up and down completely randomly.
Pair Corralation between Matas AS and Pandora AS
Assuming the 90 days trading horizon Matas AS is expected to generate 1.11 times less return on investment than Pandora AS. But when comparing it to its historical volatility, Matas AS is 1.01 times less risky than Pandora AS. It trades about 0.07 of its potential returns per unit of risk. Pandora AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 81,800 in Pandora AS on September 1, 2024 and sell it today you would earn a total of 31,850 from holding Pandora AS or generate 38.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matas AS vs. Pandora AS
Performance |
| Timeline |
| Matas AS |
| Pandora AS |
Matas AS and Pandora AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matas AS and Pandora AS
The main advantage of trading using opposite Matas AS and Pandora AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matas AS position performs unexpectedly, Pandora AS 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 Pandora AS will offset losses from the drop in Pandora AS's long position.The idea behind Matas AS and Pandora AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Pandora AS vs. Ralph Lauren Corp | Pandora AS vs. Tapestry | Pandora AS vs. PVH Corp | Pandora AS vs. Levi Strauss Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
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