Correlation Between MEGA METAL and CarrefourSA Carrefour
Can any of the company-specific risk be diversified away by investing in both MEGA METAL and CarrefourSA Carrefour 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 MEGA METAL and CarrefourSA Carrefour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEGA METAL and CarrefourSA Carrefour Sabanci, you can compare the effects of market volatilities on MEGA METAL and CarrefourSA Carrefour 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 MEGA METAL with a short position of CarrefourSA Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEGA METAL and CarrefourSA Carrefour.
Diversification Opportunities for MEGA METAL and CarrefourSA Carrefour
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between MEGA and CarrefourSA is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MEGA METAL and CarrefourSA Carrefour Sabanci in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarrefourSA Carrefour and MEGA METAL 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 MEGA METAL are associated (or correlated) with CarrefourSA Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarrefourSA Carrefour has no effect on the direction of MEGA METAL i.e., MEGA METAL and CarrefourSA Carrefour go up and down completely randomly.
Pair Corralation between MEGA METAL and CarrefourSA Carrefour
Assuming the 90 days trading horizon MEGA METAL is expected to generate 1.28 times less return on investment than CarrefourSA Carrefour. In addition to that, MEGA METAL is 1.21 times more volatile than CarrefourSA Carrefour Sabanci. It trades about 0.03 of its total potential returns per unit of risk. CarrefourSA Carrefour Sabanci is currently generating about 0.04 per unit of volatility. If you would invest 7,950 in CarrefourSA Carrefour Sabanci on September 13, 2024 and sell it today you would earn a total of 3,750 from holding CarrefourSA Carrefour Sabanci or generate 47.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
MEGA METAL vs. CarrefourSA Carrefour Sabanci
Performance |
| Timeline |
| MEGA METAL |
| CarrefourSA Carrefour |
MEGA METAL and CarrefourSA Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEGA METAL and CarrefourSA Carrefour
The main advantage of trading using opposite MEGA METAL and CarrefourSA Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEGA METAL position performs unexpectedly, CarrefourSA Carrefour 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 CarrefourSA Carrefour will offset losses from the drop in CarrefourSA Carrefour's long position.| MEGA METAL vs. SASA Polyester Sanayi | MEGA METAL vs. Turkish Airlines | MEGA METAL vs. Koc Holding AS | MEGA METAL vs. Ford Otomotiv Sanayi |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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