Correlation Between TRAVEL LEISURE and MBANK
Can any of the company-specific risk be diversified away by investing in both TRAVEL LEISURE and MBANK 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 TRAVEL LEISURE and MBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and MBANK, you can compare the effects of market volatilities on TRAVEL LEISURE and MBANK 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 TRAVEL LEISURE with a short position of MBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL LEISURE and MBANK.
Diversification Opportunities for TRAVEL LEISURE and MBANK
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TRAVEL and MBANK is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and MBANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBANK and TRAVEL LEISURE 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 TRAVEL LEISURE DL 01 are associated (or correlated) with MBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBANK has no effect on the direction of TRAVEL LEISURE i.e., TRAVEL LEISURE and MBANK go up and down completely randomly.
Pair Corralation between TRAVEL LEISURE and MBANK
Assuming the 90 days trading horizon TRAVEL LEISURE DL 01 is expected to generate 0.72 times more return on investment than MBANK. However, TRAVEL LEISURE DL 01 is 1.38 times less risky than MBANK. It trades about 0.11 of its potential returns per unit of risk. MBANK is currently generating about 0.0 per unit of risk. If you would invest 4,104 in TRAVEL LEISURE DL 01 on October 26, 2024 and sell it today you would earn a total of 996.00 from holding TRAVEL LEISURE DL 01 or generate 24.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
TRAVEL LEISURE DL 01 vs. MBANK
Performance |
| Timeline |
| TRAVEL LEISURE DL |
| MBANK |
TRAVEL LEISURE and MBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAVEL LEISURE and MBANK
The main advantage of trading using opposite TRAVEL LEISURE and MBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAVEL LEISURE position performs unexpectedly, MBANK 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 MBANK will offset losses from the drop in MBANK's long position.| TRAVEL LEISURE vs. TRIPCOM GROUP DL 00125 | TRAVEL LEISURE vs. TripAdvisor | TRAVEL LEISURE vs. MakeMyTrip Limited | TRAVEL LEISURE vs. FOSTOURGRP EO 0001 |
| MBANK vs. ARISTOCRAT LEISURE | MBANK vs. Harmony Gold Mining | MBANK vs. GALENA MINING LTD | MBANK vs. TRAVEL LEISURE DL 01 |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |