Correlation Between Online Brands and MTI Investment
Can any of the company-specific risk be diversified away by investing in both Online Brands and MTI Investment 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 Online Brands and MTI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Online Brands Nordic and MTI Investment SE, you can compare the effects of market volatilities on Online Brands and MTI Investment 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 Online Brands with a short position of MTI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Online Brands and MTI Investment.
Diversification Opportunities for Online Brands and MTI Investment
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Online and MTI is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Online Brands Nordic and MTI Investment SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Investment SE and Online Brands 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 Online Brands Nordic are associated (or correlated) with MTI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Investment SE has no effect on the direction of Online Brands i.e., Online Brands and MTI Investment go up and down completely randomly.
Pair Corralation between Online Brands and MTI Investment
Assuming the 90 days trading horizon Online Brands Nordic is expected to under-perform the MTI Investment. In addition to that, Online Brands is 1.67 times more volatile than MTI Investment SE. It trades about -0.13 of its total potential returns per unit of risk. MTI Investment SE is currently generating about 0.03 per unit of volatility. If you would invest 123.00 in MTI Investment SE on August 28, 2024 and sell it today you would earn a total of 1.00 from holding MTI Investment SE or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Online Brands Nordic vs. MTI Investment SE
Performance |
| Timeline |
| Online Brands Nordic |
| MTI Investment SE |
Online Brands and MTI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Online Brands and MTI Investment
The main advantage of trading using opposite Online Brands and MTI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Online Brands position performs unexpectedly, MTI Investment 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 MTI Investment will offset losses from the drop in MTI Investment's long position.| Online Brands vs. New Wave Group | Online Brands vs. Clas Ohlson AB | Online Brands vs. BE Group AB | Online Brands vs. Betsson AB |
| MTI Investment vs. Norva24 Group AB | MTI Investment vs. KABE Group AB | MTI Investment vs. IAR Systems Group | MTI Investment vs. Clinical Laserthermia Systems |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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