Correlation Between MCI Management and SUNEX SA
Can any of the company-specific risk be diversified away by investing in both MCI Management and SUNEX 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 SUNEX 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 SUNEX SA, you can compare the effects of market volatilities on MCI Management and SUNEX 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 SUNEX SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and SUNEX SA.
Diversification Opportunities for MCI Management and SUNEX SA
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MCI and SUNEX is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and SUNEX SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNEX 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 SUNEX SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNEX SA has no effect on the direction of MCI Management i.e., MCI Management and SUNEX SA go up and down completely randomly.
Pair Corralation between MCI Management and SUNEX SA
Assuming the 90 days trading horizon MCI Management SA is expected to under-perform the SUNEX SA. But the stock apears to be less risky and, when comparing its historical volatility, MCI Management SA is 7.0 times less risky than SUNEX SA. The stock trades about -0.09 of its potential returns per unit of risk. The SUNEX SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 620.00 in SUNEX SA on October 9, 2024 and sell it today you would earn a total of 20.00 from holding SUNEX SA or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCI Management SA vs. SUNEX SA
Performance |
| Timeline |
| MCI Management SA |
| SUNEX SA |
MCI Management and SUNEX SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCI Management and SUNEX SA
The main advantage of trading using opposite MCI Management and SUNEX SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCI Management position performs unexpectedly, SUNEX 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 SUNEX SA will offset losses from the drop in SUNEX SA's long position.| MCI Management vs. Noble Financials SA | MCI Management vs. Quantum Software SA | MCI Management vs. Skyline Investment SA | MCI Management vs. X Trade Brokers |
| SUNEX SA vs. GreenX Metals | SUNEX SA vs. Skyline Investment SA | SUNEX SA vs. Inter Cars SA | SUNEX SA vs. Quantum Software 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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