Correlation Between Hospital Mater and Mangels Industrial

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

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

Diversification Opportunities for Hospital Mater and Mangels Industrial

0.46

Correlation Coefficient

Hospital Mater  Mangels Industrial

Very weak diversification

The 3 months correlation between Hospital and Mangels is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hospital Mater Dei and Mangels Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangels Industrial and Hospital Mater 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 Hospital Mater Dei are associated (or correlated) with Mangels Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangels Industrial has no effect on the direction of Hospital Mater i.e., Hospital Mater and Mangels Industrial go up and down completely randomly.

Pair Corralation between Hospital Mater and Mangels Industrial

Assuming the 90 days trading horizon Hospital Mater is expected to generate 2.19 times less return on investment than Mangels Industrial. But when comparing it to its historical volatility, Hospital Mater Dei is 2.01 times less risky than Mangels Industrial. It trades about 0.06 of its potential returns per unit of risk. Mangels Industrial SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  697.00  in Mangels Industrial SA on October 24, 2024 and sell it today you would earn a total of  28.00  from holding Mangels Industrial SA or generate 4.02% return on investment over 90 days.

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

Hospital Mater Dei  vs.  Mangels Industrial SA

Hospital Mater Dei

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hospital Mater Dei has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mangels Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mangels Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Preferred Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Hospital Mater and Mangels Industrial

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

The idea behind Hospital Mater Dei and Mangels Industrial 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.