Correlation Between Mlk Foods and Intersport Polska
Can any of the company-specific risk be diversified away by investing in both Mlk Foods and Intersport Polska 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 Mlk Foods and Intersport Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mlk Foods Public and Intersport Polska SA, you can compare the effects of market volatilities on Mlk Foods and Intersport Polska 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 Mlk Foods with a short position of Intersport Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mlk Foods and Intersport Polska.
Diversification Opportunities for Mlk Foods and Intersport Polska
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mlk and Intersport is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mlk Foods Public and Intersport Polska SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intersport Polska and Mlk Foods 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 Mlk Foods Public are associated (or correlated) with Intersport Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intersport Polska has no effect on the direction of Mlk Foods i.e., Mlk Foods and Intersport Polska go up and down completely randomly.
Pair Corralation between Mlk Foods and Intersport Polska
Assuming the 90 days trading horizon Mlk Foods is expected to generate 1.5 times less return on investment than Intersport Polska. But when comparing it to its historical volatility, Mlk Foods Public is 1.25 times less risky than Intersport Polska. It trades about 0.12 of its potential returns per unit of risk. Intersport Polska SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 63.00 in Intersport Polska SA on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Intersport Polska SA or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mlk Foods Public vs. Intersport Polska SA
Performance |
| Timeline |
| Mlk Foods Public |
| Intersport Polska |
Mlk Foods and Intersport Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mlk Foods and Intersport Polska
The main advantage of trading using opposite Mlk Foods and Intersport Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mlk Foods position performs unexpectedly, Intersport Polska 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 Intersport Polska will offset losses from the drop in Intersport Polska's long position.| Mlk Foods vs. MCI Management SA | Mlk Foods vs. Quantum Software SA | Mlk Foods vs. Inter Cars SA | Mlk Foods vs. Igoria Trade 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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