Correlation Between Industria and Mr Price
Can any of the company-specific risk be diversified away by investing in both Industria and Mr Price 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 Industria and Mr Price into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industria de Diseno and Mr Price Group, you can compare the effects of market volatilities on Industria and Mr Price 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 Industria with a short position of Mr Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industria and Mr Price.
Diversification Opportunities for Industria and Mr Price
Very good diversification
The 3 months correlation between Industria and MRPLY is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Industria de Diseno and Mr Price Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Price Group and Industria 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 Industria de Diseno are associated (or correlated) with Mr Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Price Group has no effect on the direction of Industria i.e., Industria and Mr Price go up and down completely randomly.
Pair Corralation between Industria and Mr Price
Assuming the 90 days horizon Industria de Diseno is expected to generate 0.6 times more return on investment than Mr Price. However, Industria de Diseno is 1.68 times less risky than Mr Price. It trades about 0.1 of its potential returns per unit of risk. Mr Price Group is currently generating about 0.05 per unit of risk. If you would invest 1,386 in Industria de Diseno on October 9, 2024 and sell it today you would earn a total of 1,242 from holding Industria de Diseno or generate 89.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 96.17% |
Values | Daily Returns |
Industria de Diseno vs. Mr Price Group
Performance |
Timeline |
Industria de Diseno |
Mr Price Group |
Industria and Mr Price Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Industria and Mr Price
The main advantage of trading using opposite Industria and Mr Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industria position performs unexpectedly, Mr Price 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 Mr Price will offset losses from the drop in Mr Price's long position.Industria vs. Aritzia | Industria vs. Boot Barn Holdings | Industria vs. Guess Inc | Industria vs. The TJX Companies |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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