Correlation Between Spotify Technology and Mangels Industrial
Can any of the company-specific risk be diversified away by investing in both Spotify Technology and Mangels Industrial 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 Spotify Technology and Mangels Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and Mangels Industrial SA, you can compare the effects of market volatilities on Spotify Technology and Mangels Industrial 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 Spotify Technology with a short position of Mangels Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Mangels Industrial.
Diversification Opportunities for Spotify Technology and Mangels Industrial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Spotify and Mangels is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Mangels Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangels Industrial and Spotify Technology 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 Spotify Technology SA are associated (or correlated) with Mangels Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangels Industrial has no effect on the direction of Spotify Technology i.e., Spotify Technology and Mangels Industrial go up and down completely randomly.
Pair Corralation between Spotify Technology and Mangels Industrial
Assuming the 90 days trading horizon Spotify Technology is expected to generate 1.75 times less return on investment than Mangels Industrial. But when comparing it to its historical volatility, Spotify Technology SA is 1.61 times less risky than Mangels Industrial. It trades about 0.2 of its potential returns per unit of risk. Mangels Industrial SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 701.00 in Mangels Industrial SA on November 4, 2024 and sell it today you would earn a total of 154.00 from holding Mangels Industrial SA or generate 21.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spotify Technology SA vs. Mangels Industrial SA
Performance |
| Timeline |
| Spotify Technology |
| Mangels Industrial |
Spotify Technology and Mangels Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and Mangels Industrial
The main advantage of trading using opposite Spotify Technology and Mangels Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology position performs unexpectedly, Mangels Industrial 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 Mangels Industrial will offset losses from the drop in Mangels Industrial's long position.| Spotify Technology vs. Alaska Air Group, | Spotify Technology vs. Zoom Video Communications | Spotify Technology vs. Warner Music Group | Spotify Technology vs. Taiwan Semiconductor Manufacturing |
| Mangels Industrial vs. Inepar SA Indstria | Mangels Industrial vs. Lupatech SA | Mangels Industrial vs. Paranapanema SA | Mangels Industrial vs. Plascar Participaes Industriais |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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