Correlation Between SOFTWARE MANSION and M Food
Can any of the company-specific risk be diversified away by investing in both SOFTWARE MANSION and M Food 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 SOFTWARE MANSION and M Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFTWARE MANSION SPOLKA and M Food SA, you can compare the effects of market volatilities on SOFTWARE MANSION and M Food 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 SOFTWARE MANSION with a short position of M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFTWARE MANSION and M Food.
Diversification Opportunities for SOFTWARE MANSION and M Food
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOFTWARE and MFD is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SOFTWARE MANSION SPOLKA and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food SA and SOFTWARE MANSION 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 SOFTWARE MANSION SPOLKA are associated (or correlated) with M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of SOFTWARE MANSION i.e., SOFTWARE MANSION and M Food go up and down completely randomly.
Pair Corralation between SOFTWARE MANSION and M Food
Assuming the 90 days trading horizon SOFTWARE MANSION SPOLKA is expected to generate 0.46 times more return on investment than M Food. However, SOFTWARE MANSION SPOLKA is 2.19 times less risky than M Food. It trades about -0.12 of its potential returns per unit of risk. M Food SA is currently generating about -0.08 per unit of risk. If you would invest 3,380 in SOFTWARE MANSION SPOLKA on November 2, 2024 and sell it today you would lose (480.00) from holding SOFTWARE MANSION SPOLKA or give up 14.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.18% |
| Values | Daily Returns |
SOFTWARE MANSION SPOLKA vs. M Food SA
Performance |
| Timeline |
| SOFTWARE MANSION SPOLKA |
| M Food SA |
SOFTWARE MANSION and M Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOFTWARE MANSION and M Food
The main advantage of trading using opposite SOFTWARE MANSION and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFTWARE MANSION position performs unexpectedly, M Food 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 M Food will offset losses from the drop in M Food's long position.| SOFTWARE MANSION vs. Banco Santander SA | SOFTWARE MANSION vs. UniCredit SpA | SOFTWARE MANSION vs. CEZ as | SOFTWARE MANSION vs. Polski Koncern Naftowy |
| M Food vs. Asseco Business Solutions | M Food vs. Movie Games SA | M Food vs. Altustfi | M Food vs. 3R Games 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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