Correlation Between Manitou BF and Methanor
Can any of the company-specific risk be diversified away by investing in both Manitou BF and Methanor 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 Manitou BF and Methanor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and Methanor, you can compare the effects of market volatilities on Manitou BF and Methanor 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 Manitou BF with a short position of Methanor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Methanor.
Diversification Opportunities for Manitou BF and Methanor
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Manitou and Methanor is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Methanor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methanor and Manitou BF 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 Manitou BF SA are associated (or correlated) with Methanor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methanor has no effect on the direction of Manitou BF i.e., Manitou BF and Methanor go up and down completely randomly.
Pair Corralation between Manitou BF and Methanor
Assuming the 90 days trading horizon Manitou BF SA is expected to generate 0.84 times more return on investment than Methanor. However, Manitou BF SA is 1.19 times less risky than Methanor. It trades about -0.23 of its potential returns per unit of risk. Methanor is currently generating about -0.3 per unit of risk. If you would invest 1,734 in Manitou BF SA on September 1, 2024 and sell it today you would lose (164.00) from holding Manitou BF SA or give up 9.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitou BF SA vs. Methanor
Performance |
| Timeline |
| Manitou BF SA |
| Methanor |
Manitou BF and Methanor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and Methanor
The main advantage of trading using opposite Manitou BF and Methanor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, Methanor 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 Methanor will offset losses from the drop in Methanor's long position.| Manitou BF vs. Haulotte Group SA | Manitou BF vs. Trigano SA | Manitou BF vs. Bnteau SA | Manitou BF vs. Derichebourg |
| Methanor vs. Voltalia SA | Methanor vs. Ecoslops SA | Methanor vs. Agripower France Sa | Methanor vs. Glob Bioenergi |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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