Correlation Between Movie Games and M Food
Can any of the company-specific risk be diversified away by investing in both Movie Games and M Food 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 Movie Games and M Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Movie Games SA and M Food SA, you can compare the effects of market volatilities on Movie Games and M Food 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 Movie Games with a short position of M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Movie Games and M Food.
Diversification Opportunities for Movie Games and M Food
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Movie and MFD is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Movie Games SA and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food SA and Movie Games 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 Movie Games SA are associated (or correlated) with M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of Movie Games i.e., Movie Games and M Food go up and down completely randomly.
Pair Corralation between Movie Games and M Food
Assuming the 90 days trading horizon Movie Games SA is expected to under-perform the M Food. But the stock apears to be less risky and, when comparing its historical volatility, Movie Games SA is 1.36 times less risky than M Food. The stock trades about -0.38 of its potential returns per unit of risk. The M Food SA is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 116.00 in M Food SA on September 4, 2024 and sell it today you would lose (3.00) from holding M Food SA or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 47.62% |
| Values | Daily Returns |
Movie Games SA vs. M Food SA
Performance |
| Timeline |
| Movie Games SA |
| M Food SA |
Movie Games and M Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Movie Games and M Food
The main advantage of trading using opposite Movie Games and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Movie Games position performs unexpectedly, M Food 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 M Food will offset losses from the drop in M Food's long position.| Movie Games vs. CD PROJEKT SA | Movie Games vs. PLAYWAY SA | Movie Games vs. 11 bit studios | Movie Games vs. TEN SQUARE GAMES |
| M Food vs. Asseco Business Solutions | M Food vs. Kogeneracja SA | M Food vs. Asseco South Eastern | M Food vs. Movie Games SA |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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