Correlation Between Mercedes Benz and Mahindra Mahindra
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz and Mahindra Mahindra 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 Mercedes Benz and Mahindra Mahindra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group AG and Mahindra Mahindra Limited, you can compare the effects of market volatilities on Mercedes Benz and Mahindra Mahindra 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 Mercedes Benz with a short position of Mahindra Mahindra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and Mahindra Mahindra.
Diversification Opportunities for Mercedes Benz and Mahindra Mahindra
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mercedes and Mahindra is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group AG and Mahindra Mahindra Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mahindra Mahindra and Mercedes Benz 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 Mercedes Benz Group AG are associated (or correlated) with Mahindra Mahindra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mahindra Mahindra has no effect on the direction of Mercedes Benz i.e., Mercedes Benz and Mahindra Mahindra go up and down completely randomly.
Pair Corralation between Mercedes Benz and Mahindra Mahindra
Assuming the 90 days horizon Mercedes Benz Group AG is expected to under-perform the Mahindra Mahindra. But the pink sheet apears to be less risky and, when comparing its historical volatility, Mercedes Benz Group AG is 1.27 times less risky than Mahindra Mahindra. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Mahindra Mahindra Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,496 in Mahindra Mahindra Limited on August 30, 2024 and sell it today you would earn a total of 64.00 from holding Mahindra Mahindra Limited or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercedes Benz Group AG vs. Mahindra Mahindra Limited
Performance |
| Timeline |
| Mercedes Benz Group |
| Mahindra Mahindra |
Mercedes Benz and Mahindra Mahindra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercedes Benz and Mahindra Mahindra
The main advantage of trading using opposite Mercedes Benz and Mahindra Mahindra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz position performs unexpectedly, Mahindra Mahindra 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 Mahindra Mahindra will offset losses from the drop in Mahindra Mahindra's long position.| Mercedes Benz vs. Bayerische Motoren Werke | Mercedes Benz vs. Volkswagen AG Pref | Mercedes Benz vs. Porsche Automobile Holding | Mercedes Benz vs. Volkswagen AG |
| Mahindra Mahindra vs. Buhler Industries | Mahindra Mahindra vs. AmeraMex International | Mahindra Mahindra vs. Textainer Group Holdings | Mahindra Mahindra vs. Deere Company |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |