Correlation Between MCI Management and SOFTWARE MANSION
Can any of the company-specific risk be diversified away by investing in both MCI Management and SOFTWARE MANSION 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 SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA, you can compare the effects of market volatilities on MCI Management and SOFTWARE MANSION 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 SOFTWARE MANSION. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and SOFTWARE MANSION.
Diversification Opportunities for MCI Management and SOFTWARE MANSION
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MCI and SOFTWARE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and SOFTWARE MANSION SPOLKA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFTWARE MANSION SPOLKA 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 SOFTWARE MANSION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFTWARE MANSION SPOLKA has no effect on the direction of MCI Management i.e., MCI Management and SOFTWARE MANSION go up and down completely randomly.
Pair Corralation between MCI Management and SOFTWARE MANSION
Assuming the 90 days trading horizon MCI Management SA is expected to generate 0.46 times more return on investment than SOFTWARE MANSION. However, MCI Management SA is 2.16 times less risky than SOFTWARE MANSION. It trades about 0.05 of its potential returns per unit of risk. SOFTWARE MANSION SPOLKA is currently generating about 0.02 per unit of risk. If you would invest 1,620 in MCI Management SA on August 26, 2024 and sell it today you would earn a total of 890.00 from holding MCI Management SA or generate 54.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.2% |
| Values | Daily Returns |
MCI Management SA vs. SOFTWARE MANSION SPOLKA
Performance |
| Timeline |
| MCI Management SA |
| SOFTWARE MANSION SPOLKA |
MCI Management and SOFTWARE MANSION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCI Management and SOFTWARE MANSION
The main advantage of trading using opposite MCI Management and SOFTWARE MANSION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCI Management position performs unexpectedly, SOFTWARE MANSION 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 SOFTWARE MANSION will offset losses from the drop in SOFTWARE MANSION's long position.The idea behind MCI Management SA and SOFTWARE MANSION SPOLKA 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.| SOFTWARE MANSION vs. Banco Santander SA | SOFTWARE MANSION vs. UniCredit SpA | SOFTWARE MANSION vs. CEZ as | SOFTWARE MANSION vs. Polski Koncern Naftowy |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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