Correlation Between MCI Management and Kool2play
Can any of the company-specific risk be diversified away by investing in both MCI Management and Kool2play 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 Kool2play 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 Kool2play SA, you can compare the effects of market volatilities on MCI Management and Kool2play 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 Kool2play. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and Kool2play.
Diversification Opportunities for MCI Management and Kool2play
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MCI and Kool2play is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and Kool2play SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kool2play 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 Kool2play. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kool2play SA has no effect on the direction of MCI Management i.e., MCI Management and Kool2play go up and down completely randomly.
Pair Corralation between MCI Management and Kool2play
Assuming the 90 days trading horizon MCI Management SA is expected to generate 0.45 times more return on investment than Kool2play. However, MCI Management SA is 2.23 times less risky than Kool2play. It trades about 0.02 of its potential returns per unit of risk. Kool2play SA is currently generating about -0.09 per unit of risk. If you would invest 2,500 in MCI Management SA on September 12, 2024 and sell it today you would earn a total of 30.00 from holding MCI Management SA or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.13% |
| Values | Daily Returns |
MCI Management SA vs. Kool2play SA
Performance |
| Timeline |
| MCI Management SA |
| Kool2play SA |
MCI Management and Kool2play Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCI Management and Kool2play
The main advantage of trading using opposite MCI Management and Kool2play positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCI Management position performs unexpectedly, Kool2play 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 Kool2play will offset losses from the drop in Kool2play's long position.| MCI Management vs. Echo Investment SA | MCI Management vs. Skyline Investment SA | MCI Management vs. Play2Chill SA | MCI Management vs. Quantum Software SA |
| Kool2play vs. Movie Games SA | Kool2play vs. CI Games SA | Kool2play vs. Gaming Factory SA | Kool2play vs. True Games Syndicate |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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