Correlation Between Mangels Industrial and Refinaria
Can any of the company-specific risk be diversified away by investing in both Mangels Industrial and Refinaria 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 Refinaria 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 Refinaria de Petrleos, you can compare the effects of market volatilities on Mangels Industrial and Refinaria 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 Refinaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mangels Industrial and Refinaria.
Diversification Opportunities for Mangels Industrial and Refinaria
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mangels and Refinaria is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and Refinaria de Petrleos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refinaria de Petrleos 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 Refinaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refinaria de Petrleos has no effect on the direction of Mangels Industrial i.e., Mangels Industrial and Refinaria go up and down completely randomly.
Pair Corralation between Mangels Industrial and Refinaria
Assuming the 90 days trading horizon Mangels Industrial SA is expected to under-perform the Refinaria. In addition to that, Mangels Industrial is 1.04 times more volatile than Refinaria de Petrleos. It trades about -0.09 of its total potential returns per unit of risk. Refinaria de Petrleos is currently generating about 0.03 per unit of volatility. If you would invest 218.00 in Refinaria de Petrleos on September 4, 2024 and sell it today you would earn a total of 35.00 from holding Refinaria de Petrleos or generate 16.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Mangels Industrial SA vs. Refinaria de Petrleos
Performance |
| Timeline |
| Mangels Industrial |
| Refinaria de Petrleos |
Mangels Industrial and Refinaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mangels Industrial and Refinaria
The main advantage of trading using opposite Mangels Industrial and Refinaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangels Industrial position performs unexpectedly, Refinaria 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 Refinaria will offset losses from the drop in Refinaria'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 |
| Refinaria vs. Lupatech SA | Refinaria vs. Recrusul SA | Refinaria vs. PDG Realty SA | Refinaria vs. OSX Brasil 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |