Correlation Between MCI Management and IMC SA
Can any of the company-specific risk be diversified away by investing in both MCI Management and IMC 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 MCI Management and IMC SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCI Management SA and IMC SA, you can compare the effects of market volatilities on MCI Management and IMC 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 MCI Management with a short position of IMC SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and IMC SA.
Diversification Opportunities for MCI Management and IMC SA
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MCI and IMC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and IMC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMC SA and MCI Management 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 MCI Management SA are associated (or correlated) with IMC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMC SA has no effect on the direction of MCI Management i.e., MCI Management and IMC SA go up and down completely randomly.
Pair Corralation between MCI Management and IMC SA
Assuming the 90 days trading horizon MCI Management SA is expected to under-perform the IMC SA. But the stock apears to be less risky and, when comparing its historical volatility, MCI Management SA is 2.49 times less risky than IMC SA. The stock trades about -0.17 of its potential returns per unit of risk. The IMC SA is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,270 in IMC SA on September 15, 2024 and sell it today you would earn a total of 325.00 from holding IMC SA or generate 25.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCI Management SA vs. IMC SA
Performance |
| Timeline |
| MCI Management SA |
| IMC SA |
MCI Management and IMC SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCI Management and IMC SA
The main advantage of trading using opposite MCI Management and IMC SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCI Management position performs unexpectedly, IMC 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 IMC SA will offset losses from the drop in IMC SA's long position.| MCI Management vs. Detalion Games SA | MCI Management vs. Cloud Technologies SA | MCI Management vs. CI Games SA | MCI Management vs. Biztech Konsulting SA |
| IMC SA vs. Play2Chill SA | IMC SA vs. Quantum Software SA | IMC SA vs. True Games Syndicate | IMC SA vs. MCI Management 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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