Correlation Between MBank SA and AC SA
Can any of the company-specific risk be diversified away by investing in both MBank SA and AC SA 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 MBank SA and AC SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mBank SA and AC SA, you can compare the effects of market volatilities on MBank SA and AC SA 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 MBank SA with a short position of AC SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBank SA and AC SA.
Diversification Opportunities for MBank SA and AC SA
Very good diversification
The 3 months correlation between MBank and ACG is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and AC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AC SA and MBank SA 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 mBank SA are associated (or correlated) with AC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AC SA has no effect on the direction of MBank SA i.e., MBank SA and AC SA go up and down completely randomly.
Pair Corralation between MBank SA and AC SA
Assuming the 90 days trading horizon mBank SA is expected to under-perform the AC SA. In addition to that, MBank SA is 1.62 times more volatile than AC SA. It trades about -0.13 of its total potential returns per unit of risk. AC SA is currently generating about 0.12 per unit of volatility. If you would invest 2,700 in AC SA on September 1, 2024 and sell it today you would earn a total of 80.00 from holding AC SA or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
mBank SA vs. AC SA
Performance |
| Timeline |
| mBank SA |
| AC SA |
MBank SA and AC SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBank SA and AC SA
The main advantage of trading using opposite MBank SA and AC SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBank SA position performs unexpectedly, AC SA 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 AC SA will offset losses from the drop in AC SA's long position.| MBank SA vs. Ultimate Games SA | MBank SA vs. New Tech Venture | MBank SA vs. 3R Games SA | MBank SA vs. Biztech Konsulting SA |
| AC SA vs. Quantum Software SA | AC SA vs. Intersport Polska SA | AC SA vs. GreenX Metals | AC SA vs. Marie Brizard Wine |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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