Correlation Between Mangels Industrial and Jefferies Financial

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Can any of the company-specific risk be diversified away by investing in both Mangels Industrial and Jefferies Financial 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 Jefferies Financial 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 Jefferies Financial Group, you can compare the effects of market volatilities on Mangels Industrial and Jefferies Financial 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 Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mangels Industrial and Jefferies Financial.

Diversification Opportunities for Mangels Industrial and Jefferies Financial

-0.85
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Mangels and Jefferies is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Mangels Industrial i.e., Mangels Industrial and Jefferies Financial go up and down completely randomly.

Pair Corralation between Mangels Industrial and Jefferies Financial

Assuming the 90 days trading horizon Mangels Industrial SA is expected to under-perform the Jefferies Financial. In addition to that, Mangels Industrial is 1.64 times more volatile than Jefferies Financial Group. It trades about -0.03 of its total potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.14 per unit of volatility. If you would invest  37,055  in Jefferies Financial Group on October 24, 2024 and sell it today you would earn a total of  9,005  from holding Jefferies Financial Group or generate 24.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Mangels Industrial SA  vs.  Jefferies Financial Group

 Performance 
       Timeline  
Mangels Industrial 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mangels Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Preferred Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Jefferies Financial 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Jefferies Financial Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Jefferies Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Mangels Industrial and Jefferies Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mangels Industrial and Jefferies Financial

The main advantage of trading using opposite Mangels Industrial and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangels Industrial position performs unexpectedly, Jefferies Financial 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.
The idea behind Mangels Industrial SA and Jefferies Financial Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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