Correlation Between MCI Management and WSE WIG
Can any of the company-specific risk be diversified away by investing in both MCI Management and WSE WIG 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 WSE WIG 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 WSE WIG INDEX, you can compare the effects of market volatilities on MCI Management and WSE WIG 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 WSE WIG. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and WSE WIG.
Diversification Opportunities for MCI Management and WSE WIG
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MCI and WSE is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and WSE WIG INDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSE WIG INDEX 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 WSE WIG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSE WIG INDEX has no effect on the direction of MCI Management i.e., MCI Management and WSE WIG go up and down completely randomly.
Pair Corralation between MCI Management and WSE WIG
Assuming the 90 days trading horizon MCI Management SA is expected to generate 1.43 times more return on investment than WSE WIG. However, MCI Management is 1.43 times more volatile than WSE WIG INDEX. It trades about 0.0 of its potential returns per unit of risk. WSE WIG INDEX is currently generating about -0.05 per unit of risk. If you would invest 2,640 in MCI Management SA on August 29, 2024 and sell it today you would lose (60.00) from holding MCI Management SA or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
MCI Management SA vs. WSE WIG INDEX
Performance |
| Timeline |
MCI Management and WSE WIG Volatility Contrast
Predicted Return Density |
| Returns |
MCI Management SA
Pair trading matchups for MCI Management
WSE WIG INDEX
Pair trading matchups for WSE WIG
Pair Trading with MCI Management and WSE WIG
The main advantage of trading using opposite MCI Management and WSE WIG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCI Management position performs unexpectedly, WSE WIG 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 WSE WIG will offset losses from the drop in WSE WIG's long position.The idea behind MCI Management SA and WSE WIG INDEX 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.| WSE WIG vs. GreenX Metals | WSE WIG vs. Intersport Polska SA | WSE WIG vs. MCI Management SA | WSE WIG vs. Centrum Finansowe Banku |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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