Correlation Between Mena Transport and Praram 9

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Can any of the company-specific risk be diversified away by investing in both Mena Transport and Praram 9 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 Mena Transport and Praram 9 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mena Transport Public and Praram 9 Hospital, you can compare the effects of market volatilities on Mena Transport and Praram 9 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 Mena Transport with a short position of Praram 9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mena Transport and Praram 9.

Diversification Opportunities for Mena Transport and Praram 9

-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Mena and Praram is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mena Transport Public and Praram 9 Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praram 9 Hospital and Mena Transport 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 Mena Transport Public are associated (or correlated) with Praram 9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praram 9 Hospital has no effect on the direction of Mena Transport i.e., Mena Transport and Praram 9 go up and down completely randomly.

Pair Corralation between Mena Transport and Praram 9

Assuming the 90 days trading horizon Mena Transport Public is expected to under-perform the Praram 9. In addition to that, Mena Transport is 2.08 times more volatile than Praram 9 Hospital. It trades about -0.06 of its total potential returns per unit of risk. Praram 9 Hospital is currently generating about 0.15 per unit of volatility. If you would invest  1,468  in Praram 9 Hospital on September 3, 2024 and sell it today you would earn a total of  1,107  from holding Praram 9 Hospital or generate 75.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Mena Transport Public  vs.  Praram 9 Hospital

 Performance 
       Timeline  
Mena Transport Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mena Transport Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Mena Transport is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Praram 9 Hospital 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Praram 9 Hospital are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Praram 9 disclosed solid returns over the last few months and may actually be approaching a breakup point.

Mena Transport and Praram 9 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mena Transport and Praram 9

The main advantage of trading using opposite Mena Transport and Praram 9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mena Transport position performs unexpectedly, Praram 9 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 Praram 9 will offset losses from the drop in Praram 9's long position.
The idea behind Mena Transport Public and Praram 9 Hospital 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.
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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