Correlation Between Itay Financial and Mobile Max

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

By analyzing existing cross correlation between Itay Financial AA and Mobile Max M, you can compare the effects of market volatilities on Itay Financial and Mobile Max 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 Itay Financial with a short position of Mobile Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itay Financial and Mobile Max.

Diversification Opportunities for Itay Financial and Mobile Max

-0.65

Correlation Coefficient

Itay Financial  Mobile Max

Excellent diversification

The 3 months correlation between Itay and Mobile is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Itay Financial AA and Mobile Max M in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Max M and Itay Financial 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 Itay Financial AA are associated (or correlated) with Mobile Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Max M has no effect on the direction of Itay Financial i.e., Itay Financial and Mobile Max go up and down completely randomly.

Pair Corralation between Itay Financial and Mobile Max

Assuming the 90 days trading horizon Itay Financial AA is expected to generate 0.97 times more return on investment than Mobile Max. However, Itay Financial AA is 1.03 times less risky than Mobile Max. It trades about 0.21 of its potential returns per unit of risk. Mobile Max M is currently generating about 0.06 per unit of risk. If you would invest  27,530  in Itay Financial AA on October 11, 2024 and sell it today you would earn a total of  11,670  from holding Itay Financial AA or generate 42.39% return on investment over 90 days.

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

Itay Financial AA  vs.  Mobile Max M

Itay Financial AA

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Itay Financial AA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Itay Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Mobile Max M

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mobile Max M are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mobile Max sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Itay Financial and Mobile Max

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

The idea behind Itay Financial AA and Mobile Max M 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..