Correlation Between Miko NV and Brouwerij Handelsmaatschap
Can any of the company-specific risk be diversified away by investing in both Miko NV and Brouwerij Handelsmaatschap 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 Miko NV and Brouwerij Handelsmaatschap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miko NV and Brouwerij Handelsmaatschappij NV, you can compare the effects of market volatilities on Miko NV and Brouwerij Handelsmaatschap 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 Miko NV with a short position of Brouwerij Handelsmaatschap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miko NV and Brouwerij Handelsmaatschap.
Diversification Opportunities for Miko NV and Brouwerij Handelsmaatschap
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Miko and Brouwerij is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Miko NV and Brouwerij Handelsmaatschappij in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brouwerij Handelsmaatschap and Miko NV 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 Miko NV are associated (or correlated) with Brouwerij Handelsmaatschap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brouwerij Handelsmaatschap has no effect on the direction of Miko NV i.e., Miko NV and Brouwerij Handelsmaatschap go up and down completely randomly.
Pair Corralation between Miko NV and Brouwerij Handelsmaatschap
Assuming the 90 days trading horizon Miko NV is expected to under-perform the Brouwerij Handelsmaatschap. But the stock apears to be less risky and, when comparing its historical volatility, Miko NV is 1.15 times less risky than Brouwerij Handelsmaatschap. The stock trades about -0.05 of its potential returns per unit of risk. The Brouwerij Handelsmaatschappij NV is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 183,000 in Brouwerij Handelsmaatschappij NV on August 31, 2024 and sell it today you would lose (21,000) from holding Brouwerij Handelsmaatschappij NV or give up 11.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Miko NV vs. Brouwerij Handelsmaatschappij
Performance |
| Timeline |
| Miko NV |
| Brouwerij Handelsmaatschap |
Miko NV and Brouwerij Handelsmaatschap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miko NV and Brouwerij Handelsmaatschap
The main advantage of trading using opposite Miko NV and Brouwerij Handelsmaatschap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miko NV position performs unexpectedly, Brouwerij Handelsmaatschap 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 Brouwerij Handelsmaatschap will offset losses from the drop in Brouwerij Handelsmaatschap's long position.The idea behind Miko NV and Brouwerij Handelsmaatschappij NV 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.| Brouwerij Handelsmaatschap vs. Compagnie du Bois | Brouwerij Handelsmaatschap vs. Miko NV | Brouwerij Handelsmaatschap vs. Campine | Brouwerij Handelsmaatschap vs. Socit de Services |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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