Correlation Between MBank SA and Aplisens
Can any of the company-specific risk be diversified away by investing in both MBank SA and Aplisens 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 Aplisens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mBank SA and Aplisens SA, you can compare the effects of market volatilities on MBank SA and Aplisens 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 Aplisens. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBank SA and Aplisens.
Diversification Opportunities for MBank SA and Aplisens
Poor diversification
The 3 months correlation between MBank and Aplisens is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and Aplisens SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aplisens 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 Aplisens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aplisens SA has no effect on the direction of MBank SA i.e., MBank SA and Aplisens go up and down completely randomly.
Pair Corralation between MBank SA and Aplisens
Assuming the 90 days trading horizon mBank SA is expected to under-perform the Aplisens. In addition to that, MBank SA is 1.21 times more volatile than Aplisens SA. It trades about -0.1 of its total potential returns per unit of risk. Aplisens SA is currently generating about -0.01 per unit of volatility. If you would invest 1,920 in Aplisens SA on September 13, 2024 and sell it today you would lose (30.00) from holding Aplisens SA or give up 1.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
mBank SA vs. Aplisens SA
Performance |
| Timeline |
| mBank SA |
| Aplisens SA |
MBank SA and Aplisens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBank SA and Aplisens
The main advantage of trading using opposite MBank SA and Aplisens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBank SA position performs unexpectedly, Aplisens 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 Aplisens will offset losses from the drop in Aplisens' long position.| MBank SA vs. UniCredit SpA | MBank SA vs. Santander Bank Polska | MBank SA vs. Bank Polska Kasa | MBank SA vs. ING Bank lski |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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