Correlation Between MCI Management and PMPG Polskie
Can any of the company-specific risk be diversified away by investing in both MCI Management and PMPG Polskie 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 PMPG Polskie 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 PMPG Polskie Media, you can compare the effects of market volatilities on MCI Management and PMPG Polskie 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 PMPG Polskie. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and PMPG Polskie.
Diversification Opportunities for MCI Management and PMPG Polskie
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between MCI and PMPG is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and PMPG Polskie Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMPG Polskie Media 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 PMPG Polskie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMPG Polskie Media has no effect on the direction of MCI Management i.e., MCI Management and PMPG Polskie go up and down completely randomly.
Pair Corralation between MCI Management and PMPG Polskie
Assuming the 90 days trading horizon MCI Management SA is expected to generate 0.22 times more return on investment than PMPG Polskie. However, MCI Management SA is 4.55 times less risky than PMPG Polskie. It trades about -0.03 of its potential returns per unit of risk. PMPG Polskie Media is currently generating about -0.38 per unit of risk. If you would invest 2,530 in MCI Management SA on August 26, 2024 and sell it today you would lose (20.00) from holding MCI Management SA or give up 0.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCI Management SA vs. PMPG Polskie Media
Performance |
| Timeline |
| MCI Management SA |
| PMPG Polskie Media |
MCI Management and PMPG Polskie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCI Management and PMPG Polskie
The main advantage of trading using opposite MCI Management and PMPG Polskie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCI Management position performs unexpectedly, PMPG Polskie 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 PMPG Polskie will offset losses from the drop in PMPG Polskie's long position.The idea behind MCI Management SA and PMPG Polskie Media pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PMPG Polskie vs. Asseco Business Solutions | PMPG Polskie vs. Detalion Games SA | PMPG Polskie vs. Asseco South Eastern | PMPG Polskie vs. Movie Games 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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