Correlation Between Mangels Industrial and Bank Of
Can any of the company-specific risk be diversified away by investing in both Mangels Industrial and Bank Of 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 Mangels Industrial and Bank Of into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mangels Industrial SA and The Bank of, you can compare the effects of market volatilities on Mangels Industrial and Bank Of 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 Mangels Industrial with a short position of Bank Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mangels Industrial and Bank Of.
Diversification Opportunities for Mangels Industrial and Bank Of
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mangels and Bank is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and The Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Bank and Mangels Industrial 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 Mangels Industrial SA are associated (or correlated) with Bank Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Bank has no effect on the direction of Mangels Industrial i.e., Mangels Industrial and Bank Of go up and down completely randomly.
Pair Corralation between Mangels Industrial and Bank Of
Assuming the 90 days trading horizon Mangels Industrial SA is expected to under-perform the Bank Of. In addition to that, Mangels Industrial is 2.37 times more volatile than The Bank of. It trades about -0.25 of its total potential returns per unit of risk. The Bank of is currently generating about 0.33 per unit of volatility. If you would invest 37,924 in The Bank of on September 2, 2024 and sell it today you would earn a total of 11,508 from holding The Bank of or generate 30.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mangels Industrial SA vs. The Bank of
Performance |
| Timeline |
| Mangels Industrial |
| The Bank |
Mangels Industrial and Bank Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mangels Industrial and Bank Of
The main advantage of trading using opposite Mangels Industrial and Bank Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangels Industrial position performs unexpectedly, Bank Of 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 Bank Of will offset losses from the drop in Bank Of's long position.| Mangels Industrial vs. Inepar SA Indstria | Mangels Industrial vs. Lupatech SA | Mangels Industrial vs. Rossi Residencial SA | Mangels Industrial vs. Fras le 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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