Correlation Between Mhlbauer Holding and Datalogic SpA
Can any of the company-specific risk be diversified away by investing in both Mhlbauer Holding and Datalogic SpA 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 Mhlbauer Holding and Datalogic SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mhlbauer Holding AG and Datalogic SpA, you can compare the effects of market volatilities on Mhlbauer Holding and Datalogic SpA 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 Mhlbauer Holding with a short position of Datalogic SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mhlbauer Holding and Datalogic SpA.
Diversification Opportunities for Mhlbauer Holding and Datalogic SpA
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mhlbauer and Datalogic is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mhlbauer Holding AG and Datalogic SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datalogic SpA and Mhlbauer Holding 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 Mhlbauer Holding AG are associated (or correlated) with Datalogic SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datalogic SpA has no effect on the direction of Mhlbauer Holding i.e., Mhlbauer Holding and Datalogic SpA go up and down completely randomly.
Pair Corralation between Mhlbauer Holding and Datalogic SpA
Assuming the 90 days trading horizon Mhlbauer Holding AG is expected to generate 1.1 times more return on investment than Datalogic SpA. However, Mhlbauer Holding is 1.1 times more volatile than Datalogic SpA. It trades about -0.34 of its potential returns per unit of risk. Datalogic SpA is currently generating about -0.44 per unit of risk. If you would invest 4,220 in Mhlbauer Holding AG on August 28, 2024 and sell it today you would lose (540.00) from holding Mhlbauer Holding AG or give up 12.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mhlbauer Holding AG vs. Datalogic SpA
Performance |
| Timeline |
| Mhlbauer Holding |
| Datalogic SpA |
Mhlbauer Holding and Datalogic SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mhlbauer Holding and Datalogic SpA
The main advantage of trading using opposite Mhlbauer Holding and Datalogic SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mhlbauer Holding position performs unexpectedly, Datalogic SpA 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 Datalogic SpA will offset losses from the drop in Datalogic SpA's long position.| Mhlbauer Holding vs. Transport International Holdings | Mhlbauer Holding vs. INDOFOOD AGRI RES | Mhlbauer Holding vs. Performance Food Group | Mhlbauer Holding vs. TreeHouse Foods |
| Datalogic SpA vs. CPU SOFTWAREHOUSE | Datalogic SpA vs. Choice Hotels International | Datalogic SpA vs. AXWAY SOFTWARE EO | Datalogic SpA vs. Unity Software |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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