Correlation Between Orange SA and MRM SA
Can any of the company-specific risk be diversified away by investing in both Orange SA and MRM SA 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 Orange SA and MRM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange SA and MRM SA, you can compare the effects of market volatilities on Orange SA and MRM SA 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 Orange SA with a short position of MRM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange SA and MRM SA.
Diversification Opportunities for Orange SA and MRM SA
Pay attention - limited upside
The 3 months correlation between Orange and MRM is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Orange SA and MRM SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRM SA and Orange SA 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 Orange SA are associated (or correlated) with MRM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRM SA has no effect on the direction of Orange SA i.e., Orange SA and MRM SA go up and down completely randomly.
Pair Corralation between Orange SA and MRM SA
Assuming the 90 days trading horizon Orange SA is expected to generate 24.13 times less return on investment than MRM SA. But when comparing it to its historical volatility, Orange SA is 8.01 times less risky than MRM SA. It trades about 0.01 of its potential returns per unit of risk. MRM SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,144 in MRM SA on September 4, 2024 and sell it today you would earn a total of 1,406 from holding MRM SA or generate 65.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.48% |
| Values | Daily Returns |
Orange SA vs. MRM SA
Performance |
| Timeline |
| Orange SA |
| MRM SA |
Orange SA and MRM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange SA and MRM SA
The main advantage of trading using opposite Orange SA and MRM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange SA position performs unexpectedly, MRM SA 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 MRM SA will offset losses from the drop in MRM SA's long position.The idea behind Orange SA and MRM SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MRM SA vs. Groupe Partouche SA | MRM SA vs. Fonciere Inea | MRM SA vs. Patrimoine et Commerce | MRM SA vs. Societe de la |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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