Correlation Between Mlk Foods and Shoper SA
Can any of the company-specific risk be diversified away by investing in both Mlk Foods and Shoper SA 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 Shoper SA 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 Shoper SA, you can compare the effects of market volatilities on Mlk Foods and Shoper SA 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 Shoper SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mlk Foods and Shoper SA.
Diversification Opportunities for Mlk Foods and Shoper SA
Average diversification
The 3 months correlation between Mlk and Shoper is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mlk Foods Public and Shoper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoper SA 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 Shoper SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoper SA has no effect on the direction of Mlk Foods i.e., Mlk Foods and Shoper SA go up and down completely randomly.
Pair Corralation between Mlk Foods and Shoper SA
Assuming the 90 days trading horizon Mlk Foods Public is expected to generate 1.07 times more return on investment than Shoper SA. However, Mlk Foods is 1.07 times more volatile than Shoper SA. It trades about 0.07 of its potential returns per unit of risk. Shoper SA is currently generating about -0.1 per unit of risk. If you would invest 115.00 in Mlk Foods Public on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Mlk Foods Public or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mlk Foods Public vs. Shoper SA
Performance |
| Timeline |
| Mlk Foods Public |
| Shoper SA |
Mlk Foods and Shoper SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mlk Foods and Shoper SA
The main advantage of trading using opposite Mlk Foods and Shoper SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mlk Foods position performs unexpectedly, Shoper SA 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 Shoper SA will offset losses from the drop in Shoper SA's long position.| Mlk Foods vs. PLAYWAY SA | Mlk Foods vs. SOFTWARE MANSION SPOLKA | Mlk Foods vs. LSI Software SA | Mlk Foods vs. Cloud Technologies 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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