Correlation Between Mesabi Trust and Galp Energia
Can any of the company-specific risk be diversified away by investing in both Mesabi Trust and Galp Energia 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 Mesabi Trust and Galp Energia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesabi Trust and Galp Energia SGPS, you can compare the effects of market volatilities on Mesabi Trust and Galp Energia 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 Mesabi Trust with a short position of Galp Energia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesabi Trust and Galp Energia.
Diversification Opportunities for Mesabi Trust and Galp Energia
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mesabi and Galp is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mesabi Trust and Galp Energia SGPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galp Energia SGPS and Mesabi Trust 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 Mesabi Trust are associated (or correlated) with Galp Energia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galp Energia SGPS has no effect on the direction of Mesabi Trust i.e., Mesabi Trust and Galp Energia go up and down completely randomly.
Pair Corralation between Mesabi Trust and Galp Energia
Considering the 90-day investment horizon Mesabi Trust is expected to generate 0.61 times more return on investment than Galp Energia. However, Mesabi Trust is 1.63 times less risky than Galp Energia. It trades about 0.14 of its potential returns per unit of risk. Galp Energia SGPS is currently generating about -0.15 per unit of risk. If you would invest 2,435 in Mesabi Trust on January 10, 2025 and sell it today you would earn a total of 192.50 from holding Mesabi Trust or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mesabi Trust vs. Galp Energia SGPS
Performance |
| Timeline |
| Mesabi Trust |
| Galp Energia SGPS |
Mesabi Trust and Galp Energia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesabi Trust and Galp Energia
The main advantage of trading using opposite Mesabi Trust and Galp Energia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesabi Trust position performs unexpectedly, Galp Energia 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 Galp Energia will offset losses from the drop in Galp Energia's long position.| Mesabi Trust vs. Olympic Steel | Mesabi Trust vs. POSCO Holdings | Mesabi Trust vs. Outokumpu Oyj ADR | Mesabi Trust vs. Usinas Siderurgicas de |
| Galp Energia vs. Galp Energa | Galp Energia vs. Eni SpA | Galp Energia vs. Equinor ASA | Galp Energia vs. TotalEnergies SE |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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