Correlation Between Mangels Industrial and Lupatech
Can any of the company-specific risk be diversified away by investing in both Mangels Industrial and Lupatech 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 Lupatech 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 Lupatech SA, you can compare the effects of market volatilities on Mangels Industrial and Lupatech 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 Lupatech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mangels Industrial and Lupatech.
Diversification Opportunities for Mangels Industrial and Lupatech
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mangels and Lupatech is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and Lupatech SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupatech SA 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 Lupatech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupatech SA has no effect on the direction of Mangels Industrial i.e., Mangels Industrial and Lupatech go up and down completely randomly.
Pair Corralation between Mangels Industrial and Lupatech
Assuming the 90 days trading horizon Mangels Industrial SA is expected to under-perform the Lupatech. But the preferred stock apears to be less risky and, when comparing its historical volatility, Mangels Industrial SA is 2.18 times less risky than Lupatech. The preferred stock trades about -0.45 of its potential returns per unit of risk. The Lupatech SA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Lupatech SA on August 28, 2024 and sell it today you would lose (3.00) from holding Lupatech SA or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mangels Industrial SA vs. Lupatech SA
Performance |
| Timeline |
| Mangels Industrial |
| Lupatech SA |
Mangels Industrial and Lupatech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mangels Industrial and Lupatech
The main advantage of trading using opposite Mangels Industrial and Lupatech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangels Industrial position performs unexpectedly, Lupatech 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 Lupatech will offset losses from the drop in Lupatech's long position.| Mangels Industrial vs. Lupatech SA | Mangels Industrial vs. Rossi Residencial SA | Mangels Industrial vs. Fras le SA | Mangels Industrial vs. Clave Indices De |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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