Correlation Between Mast Global and Themes European

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

By analyzing existing cross correlation between Mast Global Battery and Themes European Luxury, you can compare the effects of market volatilities on Mast Global and Themes European 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 Mast Global with a short position of Themes European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mast Global and Themes European.

Diversification Opportunities for Mast Global and Themes European

0.23

Correlation Coefficient

Mast Global  Themes European

Modest diversification

The 3 months correlation between Mast and Themes is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mast Global Battery and Themes European Luxury in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes European Luxury and Mast Global 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 Mast Global Battery are associated (or correlated) with Themes European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes European Luxury has no effect on the direction of Mast Global i.e., Mast Global and Themes European go up and down completely randomly.

Pair Corralation between Mast Global and Themes European

Allowing for the 90-day total investment horizon Mast Global Battery is expected to generate 0.92 times more return on investment than Themes European. However, Mast Global Battery is 1.09 times less risky than Themes European. It trades about 0.0 of its potential returns per unit of risk. Themes European Luxury is currently generating about -0.08 per unit of risk. If you would invest  2,466  in Mast Global Battery on December 26, 2024 and sell it today you would lose (1.00) from holding Mast Global Battery or give up 0.04% of portfolio value over 90 days.

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

Mast Global Battery  vs.  Themes European Luxury

Mast Global Battery

Risk-Adjusted Performance

Weak

Over the last 90 days Mast Global Battery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Mast Global is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Themes European Luxury

Risk-Adjusted Performance

Very Weak

Over the last 90 days Themes European Luxury has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Themes European is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Mast Global and Themes European

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

The idea behind Mast Global Battery and Themes European Luxury 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.