Correlation Between Mangels Industrial and Microsoft
Can any of the company-specific risk be diversified away by investing in both Mangels Industrial and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on Mangels Industrial and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mangels Industrial and Microsoft.
Diversification Opportunities for Mangels Industrial and Microsoft
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mangels and Microsoft is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Mangels Industrial i.e., Mangels Industrial and Microsoft go up and down completely randomly.
Pair Corralation between Mangels Industrial and Microsoft
Assuming the 90 days trading horizon Mangels Industrial SA is expected to under-perform the Microsoft. In addition to that, Mangels Industrial is 1.41 times more volatile than Microsoft. It trades about -0.48 of its total potential returns per unit of risk. Microsoft is currently generating about 0.25 per unit of volatility. If you would invest 9,826 in Microsoft on September 1, 2024 and sell it today you would earn a total of 668.00 from holding Microsoft or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mangels Industrial SA vs. Microsoft
Performance |
| Timeline |
| Mangels Industrial |
| Microsoft |
Mangels Industrial and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mangels Industrial and Microsoft
The main advantage of trading using opposite Mangels Industrial and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangels Industrial position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft'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 |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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