Correlation Between M Food and Biztech Konsulting
Can any of the company-specific risk be diversified away by investing in both M Food and Biztech Konsulting 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 M Food and Biztech Konsulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between M Food SA and Biztech Konsulting SA, you can compare the effects of market volatilities on M Food and Biztech Konsulting 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 M Food with a short position of Biztech Konsulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Food and Biztech Konsulting.
Diversification Opportunities for M Food and Biztech Konsulting
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MFD and Biztech is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding M Food SA and Biztech Konsulting SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biztech Konsulting and M Food 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 M Food SA are associated (or correlated) with Biztech Konsulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biztech Konsulting has no effect on the direction of M Food i.e., M Food and Biztech Konsulting go up and down completely randomly.
Pair Corralation between M Food and Biztech Konsulting
Assuming the 90 days trading horizon M Food SA is expected to under-perform the Biztech Konsulting. But the stock apears to be less risky and, when comparing its historical volatility, M Food SA is 1.35 times less risky than Biztech Konsulting. The stock trades about -0.41 of its potential returns per unit of risk. The Biztech Konsulting SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Biztech Konsulting SA on September 14, 2024 and sell it today you would earn a total of 2.00 from holding Biztech Konsulting SA or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 60.0% |
| Values | Daily Returns |
M Food SA vs. Biztech Konsulting SA
Performance |
| Timeline |
| M Food SA |
| Biztech Konsulting |
M Food and Biztech Konsulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Food and Biztech Konsulting
The main advantage of trading using opposite M Food and Biztech Konsulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Food position performs unexpectedly, Biztech Konsulting 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 Biztech Konsulting will offset losses from the drop in Biztech Konsulting's long position.| M Food vs. PMPG Polskie Media | M Food vs. GreenX Metals | M Food vs. MCI Management SA | M Food vs. X Trade Brokers |
| Biztech Konsulting vs. Mlk Foods Public | Biztech Konsulting vs. GreenX Metals | Biztech Konsulting vs. M Food SA | Biztech Konsulting vs. Movie Games SA |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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