Correlation Between MBank SA and Creotech Instruments
Can any of the company-specific risk be diversified away by investing in both MBank SA and Creotech Instruments 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 Creotech Instruments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mBank SA and Creotech Instruments SA, you can compare the effects of market volatilities on MBank SA and Creotech Instruments 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 Creotech Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBank SA and Creotech Instruments.
Diversification Opportunities for MBank SA and Creotech Instruments
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MBank and Creotech is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and Creotech Instruments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creotech Instruments 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 Creotech Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creotech Instruments has no effect on the direction of MBank SA i.e., MBank SA and Creotech Instruments go up and down completely randomly.
Pair Corralation between MBank SA and Creotech Instruments
Assuming the 90 days trading horizon mBank SA is expected to under-perform the Creotech Instruments. In addition to that, MBank SA is 1.3 times more volatile than Creotech Instruments SA. It trades about -0.2 of its total potential returns per unit of risk. Creotech Instruments SA is currently generating about -0.17 per unit of volatility. If you would invest 15,200 in Creotech Instruments SA on September 2, 2024 and sell it today you would lose (800.00) from holding Creotech Instruments SA or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
mBank SA vs. Creotech Instruments SA
Performance |
| Timeline |
| mBank SA |
| Creotech Instruments |
MBank SA and Creotech Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBank SA and Creotech Instruments
The main advantage of trading using opposite MBank SA and Creotech Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBank SA position performs unexpectedly, Creotech Instruments 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 Creotech Instruments will offset losses from the drop in Creotech Instruments' long position.| MBank SA vs. Movie Games SA | MBank SA vs. 3R Games SA | MBank SA vs. Gamedust SA | MBank SA vs. Intersport Polska SA |
| Creotech Instruments vs. Asseco Business Solutions | Creotech Instruments vs. Detalion Games SA | Creotech Instruments vs. Asseco South Eastern | Creotech Instruments vs. CFI Holding SA |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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