Correlation Between M Food and Varsav Game
Can any of the company-specific risk be diversified away by investing in both M Food and Varsav Game 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 Varsav Game 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 Varsav Game Studios, you can compare the effects of market volatilities on M Food and Varsav Game 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 Varsav Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of M Food and Varsav Game.
Diversification Opportunities for M Food and Varsav Game
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFD and Varsav is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding M Food SA and Varsav Game Studios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varsav Game Studios 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 Varsav Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varsav Game Studios has no effect on the direction of M Food i.e., M Food and Varsav Game go up and down completely randomly.
Pair Corralation between M Food and Varsav Game
Assuming the 90 days trading horizon M Food SA is expected to under-perform the Varsav Game. In addition to that, M Food is 1.12 times more volatile than Varsav Game Studios. It trades about -0.07 of its total potential returns per unit of risk. Varsav Game Studios is currently generating about -0.02 per unit of volatility. If you would invest 61.00 in Varsav Game Studios on September 3, 2024 and sell it today you would lose (13.00) from holding Varsav Game Studios or give up 21.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.46% |
| Values | Daily Returns |
M Food SA vs. Varsav Game Studios
Performance |
| Timeline |
| M Food SA |
| Varsav Game Studios |
M Food and Varsav Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with M Food and Varsav Game
The main advantage of trading using opposite M Food and Varsav Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if M Food position performs unexpectedly, Varsav Game 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 Varsav Game will offset losses from the drop in Varsav Game's long position.| M Food vs. Asseco Business Solutions | M Food vs. Kogeneracja SA | M Food vs. Asseco South Eastern | M Food vs. Movie Games SA |
| Varsav Game vs. Banco Santander SA | Varsav Game vs. UniCredit SpA | Varsav Game vs. CEZ as | Varsav Game vs. Polski Koncern Naftowy |
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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