Correlation Between MTI Investment and TF Bank
Can any of the company-specific risk be diversified away by investing in both MTI Investment and TF Bank 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 TF Bank 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 TF Bank AB, you can compare the effects of market volatilities on MTI Investment and TF Bank 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 TF Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI Investment and TF Bank.
Diversification Opportunities for MTI Investment and TF Bank
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MTI and TFBANK is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding MTI Investment SE and TF Bank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TF Bank 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 TF Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TF Bank AB has no effect on the direction of MTI Investment i.e., MTI Investment and TF Bank go up and down completely randomly.
Pair Corralation between MTI Investment and TF Bank
Assuming the 90 days trading horizon MTI Investment is expected to generate 1.44 times less return on investment than TF Bank. In addition to that, MTI Investment is 1.25 times more volatile than TF Bank AB. It trades about 0.1 of its total potential returns per unit of risk. TF Bank AB is currently generating about 0.18 per unit of volatility. If you would invest 32,400 in TF Bank AB on September 12, 2024 and sell it today you would earn a total of 2,900 from holding TF Bank AB or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTI Investment SE vs. TF Bank AB
Performance |
| Timeline |
| MTI Investment SE |
| TF Bank AB |
MTI Investment and TF Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTI Investment and TF Bank
The main advantage of trading using opposite MTI Investment and TF Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTI Investment position performs unexpectedly, TF Bank 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 TF Bank will offset losses from the drop in TF Bank's long position.| MTI Investment vs. Catella AB | MTI Investment vs. Catella AB A | MTI Investment vs. KABE Group AB | MTI Investment vs. IAR Systems Group |
| TF Bank vs. Koninklijke Heijmans NV | TF Bank vs. Trelleborg AB | TF Bank vs. Ferronordic AB | TF Bank vs. KABE 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |