Correlation Between EBay and Mliuz SA

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

By analyzing existing cross correlation between eBay Inc and Mliuz SA, you can compare the effects of market volatilities on EBay and Mliuz SA 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 EBay with a short position of Mliuz SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBay and Mliuz SA.

Diversification Opportunities for EBay and Mliuz SA

-0.34

Correlation Coefficient

EBay  Mliuz SA

Very good diversification

The 3 months correlation between EBay and Mliuz is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding eBay Inc and Mliuz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mliuz SA and EBay 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 eBay Inc are associated (or correlated) with Mliuz SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mliuz SA has no effect on the direction of EBay i.e., EBay and Mliuz SA go up and down completely randomly.

Pair Corralation between EBay and Mliuz SA

Assuming the 90 days trading horizon EBay is expected to generate 31.45 times less return on investment than Mliuz SA. But when comparing it to its historical volatility, eBay Inc is 34.41 times less risky than Mliuz SA. It trades about 0.06 of its potential returns per unit of risk. Mliuz SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  465.00  in Mliuz SA on October 5, 2024 and sell it today you would lose (195.00) from holding Mliuz SA or give up 41.94% of portfolio value over 90 days.

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

eBay Inc  vs.  Mliuz SA

eBay Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in eBay Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, EBay may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mliuz SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mliuz SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Pair Trading with EBay and Mliuz SA

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

The idea behind eBay Inc and Mliuz SA 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.