Correlation Between SUNEX SA and Mlk Foods
Can any of the company-specific risk be diversified away by investing in both SUNEX SA and Mlk Foods 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 SUNEX SA and Mlk Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUNEX SA and Mlk Foods Public, you can compare the effects of market volatilities on SUNEX SA and Mlk Foods 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 SUNEX SA with a short position of Mlk Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNEX SA and Mlk Foods.
Diversification Opportunities for SUNEX SA and Mlk Foods
Good diversification
The 3 months correlation between SUNEX and Mlk is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding SUNEX SA and Mlk Foods Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mlk Foods Public and SUNEX 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 SUNEX SA are associated (or correlated) with Mlk Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mlk Foods Public has no effect on the direction of SUNEX SA i.e., SUNEX SA and Mlk Foods go up and down completely randomly.
Pair Corralation between SUNEX SA and Mlk Foods
Assuming the 90 days trading horizon SUNEX SA is expected to under-perform the Mlk Foods. But the stock apears to be less risky and, when comparing its historical volatility, SUNEX SA is 1.82 times less risky than Mlk Foods. The stock trades about -0.08 of its potential returns per unit of risk. The Mlk Foods Public is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Mlk Foods Public on December 12, 2024 and sell it today you would earn a total of 238.00 from holding Mlk Foods Public or generate 425.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUNEX SA vs. Mlk Foods Public
Performance |
| Timeline |
| SUNEX SA |
| Mlk Foods Public |
SUNEX SA and Mlk Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUNEX SA and Mlk Foods
The main advantage of trading using opposite SUNEX SA and Mlk Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUNEX SA position performs unexpectedly, Mlk Foods 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 Mlk Foods will offset losses from the drop in Mlk Foods' long position.| SUNEX SA vs. CI Games SA | ||
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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