Correlation Between PBG SA and MAHLE Metal
Can any of the company-specific risk be diversified away by investing in both PBG SA and MAHLE Metal 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 PBG SA and MAHLE Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PBG SA and MAHLE Metal Leve, you can compare the effects of market volatilities on PBG SA and MAHLE Metal 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 PBG SA with a short position of MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PBG SA and MAHLE Metal.
Diversification Opportunities for PBG SA and MAHLE Metal
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PBG and MAHLE is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PBG SA and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve and PBG 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 PBG SA are associated (or correlated) with MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of PBG SA i.e., PBG SA and MAHLE Metal go up and down completely randomly.
Pair Corralation between PBG SA and MAHLE Metal
Assuming the 90 days trading horizon PBG SA is expected to under-perform the MAHLE Metal. In addition to that, PBG SA is 1.98 times more volatile than MAHLE Metal Leve. It trades about -0.06 of its total potential returns per unit of risk. MAHLE Metal Leve is currently generating about -0.07 per unit of volatility. If you would invest 3,014 in MAHLE Metal Leve on November 6, 2024 and sell it today you would lose (241.00) from holding MAHLE Metal Leve or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PBG SA vs. MAHLE Metal Leve
Performance |
| Timeline |
| PBG SA |
| MAHLE Metal Leve |
PBG SA and MAHLE Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PBG SA and MAHLE Metal
The main advantage of trading using opposite PBG SA and MAHLE Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PBG SA position performs unexpectedly, MAHLE Metal 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 MAHLE Metal will offset losses from the drop in MAHLE Metal's long position.| PBG SA vs. Vulcabras Azaleia SA | PBG SA vs. Schulz SA | PBG SA vs. EZTEC Empreendimentos e | PBG SA vs. Tupy 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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