Correlation Between Mogo and L’Oreal Co
Can any of the company-specific risk be diversified away by investing in both Mogo and L’Oreal Co 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 Mogo and L’Oreal Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mogo Inc and LOreal Co ADR, you can compare the effects of market volatilities on Mogo and L’Oreal Co 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 Mogo with a short position of L’Oreal Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mogo and L’Oreal Co.
Diversification Opportunities for Mogo and L’Oreal Co
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mogo and L’Oreal is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Mogo Inc and LOreal Co ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOreal Co ADR and Mogo 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 Mogo Inc are associated (or correlated) with L’Oreal Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOreal Co ADR has no effect on the direction of Mogo i.e., Mogo and L’Oreal Co go up and down completely randomly.
Pair Corralation between Mogo and L’Oreal Co
Given the investment horizon of 90 days Mogo is expected to generate 4.0 times less return on investment than L’Oreal Co. In addition to that, Mogo is 2.04 times more volatile than LOreal Co ADR. It trades about 0.04 of its total potential returns per unit of risk. LOreal Co ADR is currently generating about 0.33 per unit of volatility. If you would invest 6,911 in LOreal Co ADR on November 2, 2024 and sell it today you would earn a total of 675.00 from holding LOreal Co ADR or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mogo Inc vs. LOreal Co ADR
Performance |
| Timeline |
| Mogo Inc |
| LOreal Co ADR |
Mogo and L’Oreal Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mogo and L’Oreal Co
The main advantage of trading using opposite Mogo and L’Oreal Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mogo position performs unexpectedly, L’Oreal Co 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 L’Oreal Co will offset losses from the drop in L’Oreal Co's long position.| Mogo vs. Katapult Holdings Equity | Mogo vs. International Money Express | Mogo vs. Bakkt Holdings | Mogo vs. Kaltura |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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