Correlation Between Multi Retail and Terminal X
Can any of the company-specific risk be diversified away by investing in both Multi Retail and Terminal X 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 Multi Retail and Terminal X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and Terminal X Online, you can compare the effects of market volatilities on Multi Retail and Terminal X 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 Multi Retail with a short position of Terminal X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and Terminal X.
Diversification Opportunities for Multi Retail and Terminal X
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multi and Terminal is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and Terminal X Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terminal X Online and Multi Retail 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 Multi Retail Group are associated (or correlated) with Terminal X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terminal X Online has no effect on the direction of Multi Retail i.e., Multi Retail and Terminal X go up and down completely randomly.
Pair Corralation between Multi Retail and Terminal X
Assuming the 90 days trading horizon Multi Retail is expected to generate 2.23 times less return on investment than Terminal X. In addition to that, Multi Retail is 1.59 times more volatile than Terminal X Online. It trades about 0.14 of its total potential returns per unit of risk. Terminal X Online is currently generating about 0.48 per unit of volatility. If you would invest 37,900 in Terminal X Online on August 29, 2024 and sell it today you would earn a total of 6,040 from holding Terminal X Online or generate 15.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Retail Group vs. Terminal X Online
Performance |
| Timeline |
| Multi Retail Group |
| Terminal X Online |
Multi Retail and Terminal X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Retail and Terminal X
The main advantage of trading using opposite Multi Retail and Terminal X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail position performs unexpectedly, Terminal X 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 Terminal X will offset losses from the drop in Terminal X's long position.| Multi Retail vs. Brainsway | Multi Retail vs. Mivne Real Estate | Multi Retail vs. Photomyne | Multi Retail vs. Bezeq Israeli Telecommunication |
| Terminal X vs. Fox Wizel | Terminal X vs. Retailors | Terminal X vs. Delek Group | Terminal X vs. Holmes Place International |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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