Correlation Between MG Plc and Hansa Investment
Can any of the company-specific risk be diversified away by investing in both MG Plc and Hansa Investment 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 MG Plc and Hansa Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MG Plc and Hansa Investment, you can compare the effects of market volatilities on MG Plc and Hansa Investment 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 MG Plc with a short position of Hansa Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MG Plc and Hansa Investment.
Diversification Opportunities for MG Plc and Hansa Investment
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MNG and Hansa is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding MG Plc and Hansa Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Investment and MG Plc 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 MG Plc are associated (or correlated) with Hansa Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Investment has no effect on the direction of MG Plc i.e., MG Plc and Hansa Investment go up and down completely randomly.
Pair Corralation between MG Plc and Hansa Investment
Assuming the 90 days trading horizon MG Plc is expected to generate 1.35 times less return on investment than Hansa Investment. But when comparing it to its historical volatility, MG Plc is 1.27 times less risky than Hansa Investment. It trades about 0.07 of its potential returns per unit of risk. Hansa Investment is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 22,300 in Hansa Investment on November 28, 2024 and sell it today you would earn a total of 500.00 from holding Hansa Investment or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MG Plc vs. Hansa Investment
Performance |
| Timeline |
| MG Plc |
| Hansa Investment |
MG Plc and Hansa Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MG Plc and Hansa Investment
The main advantage of trading using opposite MG Plc and Hansa Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MG Plc position performs unexpectedly, Hansa Investment 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 Hansa Investment will offset losses from the drop in Hansa Investment's long position.| MG Plc vs. Axway Software SA | MG Plc vs. Micron Technology | MG Plc vs. PureTech Health plc | MG Plc vs. Cognizant Technology Solutions |
| Hansa Investment vs. URU Metals | Hansa Investment vs. Fulcrum Metals PLC | Hansa Investment vs. Tata Steel Limited | Hansa Investment vs. AMG Advanced Metallurgical |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |