Correlation Between CM Hospitalar and Mangels Industrial
Can any of the company-specific risk be diversified away by investing in both CM Hospitalar 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 CM Hospitalar and Mangels Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CM Hospitalar SA and Mangels Industrial SA, you can compare the effects of market volatilities on CM Hospitalar 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 CM Hospitalar with a short position of Mangels Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CM Hospitalar and Mangels Industrial.
Diversification Opportunities for CM Hospitalar and Mangels Industrial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between VVEO3 and Mangels is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CM Hospitalar 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 CM Hospitalar 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 CM Hospitalar 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 CM Hospitalar i.e., CM Hospitalar and Mangels Industrial go up and down completely randomly.
Pair Corralation between CM Hospitalar and Mangels Industrial
Assuming the 90 days trading horizon CM Hospitalar SA is expected to under-perform the Mangels Industrial. But the stock apears to be less risky and, when comparing its historical volatility, CM Hospitalar SA is 1.51 times less risky than Mangels Industrial. The stock trades about -0.42 of its potential returns per unit of risk. The Mangels Industrial SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 695.00 in Mangels Industrial SA on November 5, 2024 and sell it today you would earn a total of 160.00 from holding Mangels Industrial SA or generate 23.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CM Hospitalar SA vs. Mangels Industrial SA
Performance |
| Timeline |
| CM Hospitalar SA |
| Mangels Industrial |
CM Hospitalar and Mangels Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CM Hospitalar and Mangels Industrial
The main advantage of trading using opposite CM Hospitalar and Mangels Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CM Hospitalar 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.| CM Hospitalar vs. Fidelity National Information | CM Hospitalar vs. Medical Properties Trust, | CM Hospitalar vs. Extra Space Storage | CM Hospitalar vs. Fresenius Medical Care |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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