Correlation Between MBank SA and VOOLT SA
Can any of the company-specific risk be diversified away by investing in both MBank SA and VOOLT 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 VOOLT 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 VOOLT SA, you can compare the effects of market volatilities on MBank SA and VOOLT 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 VOOLT SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBank SA and VOOLT SA.
Diversification Opportunities for MBank SA and VOOLT SA
Excellent diversification
The 3 months correlation between MBank and VOOLT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and VOOLT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOOLT 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 VOOLT SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VOOLT SA has no effect on the direction of MBank SA i.e., MBank SA and VOOLT SA go up and down completely randomly.
Pair Corralation between MBank SA and VOOLT SA
Assuming the 90 days trading horizon mBank SA is expected to generate 0.41 times more return on investment than VOOLT SA. However, mBank SA is 2.46 times less risky than VOOLT SA. It trades about -0.09 of its potential returns per unit of risk. VOOLT SA is currently generating about -0.04 per unit of risk. If you would invest 57,900 in mBank SA on September 12, 2024 and sell it today you would lose (2,480) from holding mBank SA or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
mBank SA vs. VOOLT SA
Performance |
| Timeline |
| mBank SA |
| VOOLT SA |
MBank SA and VOOLT SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MBank SA and VOOLT SA
The main advantage of trading using opposite MBank SA and VOOLT SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBank SA position performs unexpectedly, VOOLT 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 VOOLT SA will offset losses from the drop in VOOLT SA's 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 |
| VOOLT SA vs. M Food SA | VOOLT SA vs. Centrum Finansowe Banku | VOOLT SA vs. Santander Bank Polska | VOOLT SA vs. Saule Technologies 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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