Correlation Between Sileon AB and MTI Investment
Can any of the company-specific risk be diversified away by investing in both Sileon AB 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 Sileon AB and MTI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sileon AB and MTI Investment SE, you can compare the effects of market volatilities on Sileon AB 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 Sileon AB with a short position of MTI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sileon AB and MTI Investment.
Diversification Opportunities for Sileon AB and MTI Investment
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sileon and MTI is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sileon AB 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 Sileon AB 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 Sileon AB 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 Sileon AB i.e., Sileon AB and MTI Investment go up and down completely randomly.
Pair Corralation between Sileon AB and MTI Investment
Assuming the 90 days trading horizon Sileon AB is expected to under-perform the MTI Investment. In addition to that, Sileon AB is 1.82 times more volatile than MTI Investment SE. It trades about -0.5 of its total potential returns per unit of risk. MTI Investment SE is currently generating about -0.75 per unit of volatility. If you would invest 116.00 in MTI Investment SE on October 13, 2024 and sell it today you would lose (26.00) from holding MTI Investment SE or give up 22.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
Sileon AB vs. MTI Investment SE
Performance |
| Timeline |
| Sileon AB |
| MTI Investment SE |
Sileon AB and MTI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sileon AB and MTI Investment
The main advantage of trading using opposite Sileon AB and MTI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sileon AB 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.| Sileon AB vs. MTI Investment SE | Sileon AB vs. Indutrade AB | Sileon AB vs. Viva Wine Group | Sileon AB vs. 24SevenOffice Scandinavia AB |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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