Correlation Between Manitou BF and Moulinvest
Can any of the company-specific risk be diversified away by investing in both Manitou BF and Moulinvest 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 Moulinvest 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 Moulinvest, you can compare the effects of market volatilities on Manitou BF and Moulinvest 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 Moulinvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and Moulinvest.
Diversification Opportunities for Manitou BF and Moulinvest
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Manitou and Moulinvest is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and Moulinvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moulinvest 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 Moulinvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moulinvest has no effect on the direction of Manitou BF i.e., Manitou BF and Moulinvest go up and down completely randomly.
Pair Corralation between Manitou BF and Moulinvest
Assuming the 90 days trading horizon Manitou BF SA is expected to generate 1.09 times more return on investment than Moulinvest. However, Manitou BF is 1.09 times more volatile than Moulinvest. It trades about -0.07 of its potential returns per unit of risk. Moulinvest is currently generating about -0.15 per unit of risk. If you would invest 1,666 in Manitou BF SA on August 25, 2024 and sell it today you would lose (60.00) from holding Manitou BF SA or give up 3.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitou BF SA vs. Moulinvest
Performance |
| Timeline |
| Manitou BF SA |
| Moulinvest |
Manitou BF and Moulinvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and Moulinvest
The main advantage of trading using opposite Manitou BF and Moulinvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, Moulinvest 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 Moulinvest will offset losses from the drop in Moulinvest's long position.| Manitou BF vs. Haulotte Group SA | Manitou BF vs. Trigano SA | Manitou BF vs. Bnteau SA | Manitou BF vs. Derichebourg |
| Moulinvest vs. Neurones | Moulinvest vs. Aubay Socit Anonyme | Moulinvest vs. Infotel SA | Moulinvest vs. Manitou BF SA |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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