Correlation Between Mermeren Kombinat and Jumbo SA
Can any of the company-specific risk be diversified away by investing in both Mermeren Kombinat and Jumbo 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 Mermeren Kombinat and Jumbo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mermeren Kombinat AD and Jumbo SA, you can compare the effects of market volatilities on Mermeren Kombinat and Jumbo 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 Mermeren Kombinat with a short position of Jumbo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mermeren Kombinat and Jumbo SA.
Diversification Opportunities for Mermeren Kombinat and Jumbo SA
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mermeren and Jumbo is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mermeren Kombinat AD and Jumbo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumbo SA and Mermeren Kombinat 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 Mermeren Kombinat AD are associated (or correlated) with Jumbo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumbo SA has no effect on the direction of Mermeren Kombinat i.e., Mermeren Kombinat and Jumbo SA go up and down completely randomly.
Pair Corralation between Mermeren Kombinat and Jumbo SA
Assuming the 90 days trading horizon Mermeren Kombinat AD is expected to under-perform the Jumbo SA. In addition to that, Mermeren Kombinat is 3.38 times more volatile than Jumbo SA. It trades about -0.09 of its total potential returns per unit of risk. Jumbo SA is currently generating about -0.19 per unit of volatility. If you would invest 2,540 in Jumbo SA on August 24, 2024 and sell it today you would lose (120.00) from holding Jumbo SA or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mermeren Kombinat AD vs. Jumbo SA
Performance |
| Timeline |
| Mermeren Kombinat |
| Jumbo SA |
Mermeren Kombinat and Jumbo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mermeren Kombinat and Jumbo SA
The main advantage of trading using opposite Mermeren Kombinat and Jumbo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mermeren Kombinat position performs unexpectedly, Jumbo 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 Jumbo SA will offset losses from the drop in Jumbo SA's long position.| Mermeren Kombinat vs. Mytilineos SA | Mermeren Kombinat vs. Viohalco SA | Mermeren Kombinat vs. National Bank of | Mermeren Kombinat vs. Lampsa Hellenic Hotels |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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