Correlation Between Mobilezone Holding and MTI Wireless

Can any of the company-specific risk be diversified away by investing in both Mobilezone Holding and MTI Wireless 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 Mobilezone Holding and MTI Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between mobilezone holding AG and MTI Wireless Edge, you can compare the effects of market volatilities on Mobilezone Holding and MTI Wireless 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 Mobilezone Holding with a short position of MTI Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobilezone Holding and MTI Wireless.

Diversification Opportunities for Mobilezone Holding and MTI Wireless

-0.31

Correlation Coefficient

Mobilezone Holding  MTI Wireless

Very good diversification

The 3 months correlation between Mobilezone and MTI is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding mobilezone holding AG and MTI Wireless Edge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTI Wireless Edge and Mobilezone Holding 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 mobilezone holding AG are associated (or correlated) with MTI Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTI Wireless Edge has no effect on the direction of Mobilezone Holding i.e., Mobilezone Holding and MTI Wireless go up and down completely randomly.

Pair Corralation between Mobilezone Holding and MTI Wireless

Assuming the 90 days trading horizon Mobilezone Holding is expected to generate 2.0 times less return on investment than MTI Wireless. But when comparing it to its historical volatility, mobilezone holding AG is 1.15 times less risky than MTI Wireless. It trades about 0.32 of its potential returns per unit of risk. MTI Wireless Edge is currently generating about 0.56 of returns per unit of risk over similar time horizon. If you would invest  4,300  in MTI Wireless Edge on October 25, 2024 and sell it today you would earn a total of  900.00  from holding MTI Wireless Edge or generate 20.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

mobilezone holding AG  vs.  MTI Wireless Edge

mobilezone holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days mobilezone holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

MTI Wireless Edge

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MTI Wireless Edge are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, MTI Wireless may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mobilezone Holding and MTI Wireless

The main advantage of trading using opposite Mobilezone Holding and MTI Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobilezone Holding position performs unexpectedly, MTI Wireless 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 Wireless will offset losses from the drop in MTI Wireless' long position.

The idea behind mobilezone holding AG and MTI Wireless Edge pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.