Correlation Between MTI Investment and AcadeMedia
Can any of the company-specific risk be diversified away by investing in both MTI Investment and AcadeMedia 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 MTI Investment and AcadeMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTI Investment SE and AcadeMedia AB, you can compare the effects of market volatilities on MTI Investment and AcadeMedia 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 MTI Investment with a short position of AcadeMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI Investment and AcadeMedia.
Diversification Opportunities for MTI Investment and AcadeMedia
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MTI and AcadeMedia is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding MTI Investment SE and AcadeMedia AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AcadeMedia AB and MTI Investment 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 MTI Investment SE are associated (or correlated) with AcadeMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AcadeMedia AB has no effect on the direction of MTI Investment i.e., MTI Investment and AcadeMedia go up and down completely randomly.
Pair Corralation between MTI Investment and AcadeMedia
Assuming the 90 days trading horizon MTI Investment SE is expected to under-perform the AcadeMedia. In addition to that, MTI Investment is 2.27 times more volatile than AcadeMedia AB. It trades about -0.08 of its total potential returns per unit of risk. AcadeMedia AB is currently generating about 0.08 per unit of volatility. If you would invest 5,236 in AcadeMedia AB on November 3, 2024 and sell it today you would earn a total of 1,604 from holding AcadeMedia AB or generate 30.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTI Investment SE vs. AcadeMedia AB
Performance |
| Timeline |
| MTI Investment SE |
| AcadeMedia AB |
MTI Investment and AcadeMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI Investment and AcadeMedia
The main advantage of trading using opposite MTI Investment and AcadeMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI Investment position performs unexpectedly, AcadeMedia 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 AcadeMedia will offset losses from the drop in AcadeMedia's long position.The idea behind MTI Investment SE and AcadeMedia AB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AcadeMedia vs. Inwido AB | AcadeMedia vs. Alimak Hek Group | AcadeMedia vs. Dometic Group AB | AcadeMedia vs. Byggmax Group AB |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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