Correlation Between HomeToGo and Gruppo Mutuionline

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

By analyzing existing cross correlation between HomeToGo SE and Gruppo Mutuionline SpA, you can compare the effects of market volatilities on HomeToGo and Gruppo Mutuionline 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 HomeToGo with a short position of Gruppo Mutuionline. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and Gruppo Mutuionline.

Diversification Opportunities for HomeToGo and Gruppo Mutuionline

-0.11

Correlation Coefficient

HomeToGo  Gruppo Mutuionline

Good diversification

The 3 months correlation between HomeToGo and Gruppo is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA and HomeToGo 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 HomeToGo SE are associated (or correlated) with Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of HomeToGo i.e., HomeToGo and Gruppo Mutuionline go up and down completely randomly.

Pair Corralation between HomeToGo and Gruppo Mutuionline

Assuming the 90 days trading horizon HomeToGo SE is expected to generate 1.6 times more return on investment than Gruppo Mutuionline. However, HomeToGo is 1.6 times more volatile than Gruppo Mutuionline SpA. It trades about 0.06 of its potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about 0.06 per unit of risk. If you would invest  193.00  in HomeToGo SE on October 11, 2024 and sell it today you would earn a total of  16.00  from holding HomeToGo SE or generate 8.29% return on investment over 90 days.

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

HomeToGo SE  vs.  Gruppo Mutuionline SpA

HomeToGo SE

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HomeToGo SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, HomeToGo may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gruppo Mutuionline SpA

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gruppo Mutuionline SpA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gruppo Mutuionline may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with HomeToGo and Gruppo Mutuionline

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

The idea behind HomeToGo SE and Gruppo Mutuionline SpA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.