Correlation Between Longvie SA and Mirgor SA

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

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

Diversification Opportunities for Longvie SA and Mirgor SA

0.04

Correlation Coefficient

Longvie SA  Mirgor SA

Significant diversification

The 3 months correlation between Longvie and Mirgor is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Longvie SA and Mirgor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirgor SA and Longvie SA 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 Longvie SA are associated (or correlated) with Mirgor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirgor SA has no effect on the direction of Longvie SA i.e., Longvie SA and Mirgor SA go up and down completely randomly.

Pair Corralation between Longvie SA and Mirgor SA

Assuming the 90 days trading horizon Longvie SA is expected to under-perform the Mirgor SA. In addition to that, Longvie SA is 2.04 times more volatile than Mirgor SA. It trades about -0.21 of its total potential returns per unit of risk. Mirgor SA is currently generating about 0.13 per unit of volatility. If you would invest  2,620,000  in Mirgor SA on October 27, 2024 and sell it today you would earn a total of  85,000  from holding Mirgor SA or generate 3.24% return on investment over 90 days.

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

Longvie SA  vs.  Mirgor SA

Longvie SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Longvie SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Mirgor SA

Risk-Adjusted Performance

16 of 100

Solid

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

Pair Trading with Longvie SA and Mirgor SA

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

The idea behind Longvie SA and Mirgor 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.

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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.