Correlation Between Mangels Industrial and New Oriental
Can any of the company-specific risk be diversified away by investing in both Mangels Industrial and New Oriental 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 New Oriental 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 New Oriental Education, you can compare the effects of market volatilities on Mangels Industrial and New Oriental 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 New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mangels Industrial and New Oriental.
Diversification Opportunities for Mangels Industrial and New Oriental
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mangels and New is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and New Oriental Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Education 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 New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Education has no effect on the direction of Mangels Industrial i.e., Mangels Industrial and New Oriental go up and down completely randomly.
Pair Corralation between Mangels Industrial and New Oriental
Assuming the 90 days trading horizon Mangels Industrial SA is expected to generate 3.89 times more return on investment than New Oriental. However, Mangels Industrial is 3.89 times more volatile than New Oriental Education. It trades about 0.11 of its potential returns per unit of risk. New Oriental Education is currently generating about 0.1 per unit of risk. If you would invest 630.00 in Mangels Industrial SA on October 12, 2024 and sell it today you would earn a total of 69.00 from holding Mangels Industrial SA or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mangels Industrial SA vs. New Oriental Education
Performance |
| Timeline |
| Mangels Industrial |
| New Oriental Education |
Mangels Industrial and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mangels Industrial and New Oriental
The main advantage of trading using opposite Mangels Industrial and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangels Industrial position performs unexpectedly, New Oriental 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 New Oriental will offset losses from the drop in New Oriental's long position.| Mangels Industrial vs. Inepar SA Indstria | Mangels Industrial vs. Lupatech SA | Mangels Industrial vs. Paranapanema SA | Mangels Industrial vs. Rossi Residencial SA |
| New Oriental vs. TAL Education Group | New Oriental vs. Yduqs Participaes SA | New Oriental vs. GAEC Educacao SA | New Oriental vs. Ser Educacional 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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