Correlation Between MBank SA and Cloud Technologies
Can any of the company-specific risk be diversified away by investing in both MBank SA and Cloud Technologies 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 Cloud Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mBank SA and Cloud Technologies SA, you can compare the effects of market volatilities on MBank SA and Cloud Technologies 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 Cloud Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBank SA and Cloud Technologies.
Diversification Opportunities for MBank SA and Cloud Technologies
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MBank and Cloud is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and Cloud Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Technologies 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 Cloud Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Technologies has no effect on the direction of MBank SA i.e., MBank SA and Cloud Technologies go up and down completely randomly.
Pair Corralation between MBank SA and Cloud Technologies
Assuming the 90 days trading horizon mBank SA is expected to generate 0.95 times more return on investment than Cloud Technologies. However, mBank SA is 1.05 times less risky than Cloud Technologies. It trades about 0.45 of its potential returns per unit of risk. Cloud Technologies SA is currently generating about 0.04 per unit of risk. If you would invest 59,800 in mBank SA on November 28, 2024 and sell it today you would earn a total of 13,300 from holding mBank SA or generate 22.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
mBank SA vs. Cloud Technologies SA
Performance |
| Timeline |
| mBank SA |
| Cloud Technologies |
MBank SA and Cloud Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBank SA and Cloud Technologies
The main advantage of trading using opposite MBank SA and Cloud Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBank SA position performs unexpectedly, Cloud Technologies 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 Cloud Technologies will offset losses from the drop in Cloud Technologies' long position.| MBank SA vs. Road Studio SA | MBank SA vs. Noble Financials SA | MBank SA vs. LSI Software SA | MBank SA vs. GreenX Metals |
| Cloud Technologies vs. Igoria Trade SA | Cloud Technologies vs. LSI Software SA | Cloud Technologies vs. MCI Management SA | Cloud Technologies vs. Investment Friends Capital |
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..
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |