Correlation Between MTI Investment and Raketech Group
Can any of the company-specific risk be diversified away by investing in both MTI Investment and Raketech Group 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 Raketech Group 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 Raketech Group Holding, you can compare the effects of market volatilities on MTI Investment and Raketech Group 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 Raketech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI Investment and Raketech Group.
Diversification Opportunities for MTI Investment and Raketech Group
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MTI and Raketech is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MTI Investment SE and Raketech Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raketech Group Holding 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 Raketech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raketech Group Holding has no effect on the direction of MTI Investment i.e., MTI Investment and Raketech Group go up and down completely randomly.
Pair Corralation between MTI Investment and Raketech Group
Assuming the 90 days trading horizon MTI Investment SE is expected to generate 0.94 times more return on investment than Raketech Group. However, MTI Investment SE is 1.07 times less risky than Raketech Group. It trades about -0.08 of its potential returns per unit of risk. Raketech Group Holding is currently generating about -0.14 per unit of risk. If you would invest 176.00 in MTI Investment SE on August 30, 2024 and sell it today you would lose (61.00) from holding MTI Investment SE or give up 34.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTI Investment SE vs. Raketech Group Holding
Performance |
| Timeline |
| MTI Investment SE |
| Raketech Group Holding |
MTI Investment and Raketech Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI Investment and Raketech Group
The main advantage of trading using opposite MTI Investment and Raketech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI Investment position performs unexpectedly, Raketech Group 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 Raketech Group will offset losses from the drop in Raketech Group's long position.| MTI Investment vs. Investor AB ser | MTI Investment vs. Investment AB Latour | MTI Investment vs. Tele2 AB | MTI Investment vs. Boliden AB |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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