Correlation Between Mobile Max and Petrochemical
Can any of the company-specific risk be diversified away by investing in both Mobile Max and Petrochemical 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 Mobile Max and Petrochemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Max M and Petrochemical, you can compare the effects of market volatilities on Mobile Max and Petrochemical 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 Mobile Max with a short position of Petrochemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Max and Petrochemical.
Diversification Opportunities for Mobile Max and Petrochemical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mobile and Petrochemical is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Max M and Petrochemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrochemical and Mobile Max 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 Mobile Max M are associated (or correlated) with Petrochemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrochemical has no effect on the direction of Mobile Max i.e., Mobile Max and Petrochemical go up and down completely randomly.
Pair Corralation between Mobile Max and Petrochemical
Assuming the 90 days trading horizon Mobile Max is expected to generate 3.34 times less return on investment than Petrochemical. In addition to that, Mobile Max is 1.24 times more volatile than Petrochemical. It trades about 0.01 of its total potential returns per unit of risk. Petrochemical is currently generating about 0.04 per unit of volatility. If you would invest 15,310 in Petrochemical on September 2, 2024 and sell it today you would earn a total of 4,770 from holding Petrochemical or generate 31.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobile Max M vs. Petrochemical
Performance |
| Timeline |
| Mobile Max M |
| Petrochemical |
Mobile Max and Petrochemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Max and Petrochemical
The main advantage of trading using opposite Mobile Max and Petrochemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Max position performs unexpectedly, Petrochemical 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 Petrochemical will offset losses from the drop in Petrochemical's long position.| Mobile Max vs. Palram | Mobile Max vs. Shagrir Group Vehicle | Mobile Max vs. EN Shoham Business | Mobile Max vs. Shufersal |
| Petrochemical vs. Brainsway | Petrochemical vs. Mivne Real Estate | Petrochemical vs. Photomyne | Petrochemical vs. Israel Land Development |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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