Correlation Between MOBILE FACTORY and Metro AG

Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY and Metro AG 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 MOBILE FACTORY and Metro AG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MOBILE FACTORY INC and Metro AG, you can compare the effects of market volatilities on MOBILE FACTORY and Metro AG 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 MOBILE FACTORY with a short position of Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and Metro AG.

Diversification Opportunities for MOBILE FACTORY and Metro AG

0.05

Correlation Coefficient

MOBILE FACTORY  Metro AG

Significant diversification

The 3 months correlation between MOBILE and Metro is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG and MOBILE FACTORY 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 MOBILE FACTORY INC are associated (or correlated) with Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of MOBILE FACTORY i.e., MOBILE FACTORY and Metro AG go up and down completely randomly.

Pair Corralation between MOBILE FACTORY and Metro AG

Assuming the 90 days horizon MOBILE FACTORY INC is expected to generate 1.2 times more return on investment than Metro AG. However, MOBILE FACTORY is 1.2 times more volatile than Metro AG. It trades about 0.0 of its potential returns per unit of risk. Metro AG is currently generating about -0.08 per unit of risk. If you would invest  640.00  in MOBILE FACTORY INC on October 26, 2024 and sell it today you would lose (70.00) from holding MOBILE FACTORY INC or give up 10.94% of portfolio value over 90 days.

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

MOBILE FACTORY INC  vs.  Metro AG

MOBILE FACTORY INC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MOBILE FACTORY INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MOBILE FACTORY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Metro AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metro AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with MOBILE FACTORY and Metro AG

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

The idea behind MOBILE FACTORY INC and Metro AG 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.