Correlation Between MBank SA and 11 Bit

Can any of the company-specific risk be diversified away by investing in both MBank SA and 11 Bit 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 MBank SA and 11 Bit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between mBank SA and 11 bit studios, you can compare the effects of market volatilities on MBank SA and 11 Bit 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 MBank SA with a short position of 11 Bit. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBank SA and 11 Bit.

Diversification Opportunities for MBank SA and 11 Bit

0.7

Correlation Coefficient

MBank SA  11 Bit

Poor diversification

The 3 months correlation between MBank and 11B is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and 11 bit studios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 11 bit studios and MBank 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 mBank SA are associated (or correlated) with 11 Bit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 11 bit studios has no effect on the direction of MBank SA i.e., MBank SA and 11 Bit go up and down completely randomly.

Pair Corralation between MBank SA and 11 Bit

Assuming the 90 days trading horizon mBank SA is expected to generate 0.56 times more return on investment than 11 Bit. However, mBank SA is 1.79 times less risky than 11 Bit. It trades about 0.01 of its potential returns per unit of risk. 11 bit studios is currently generating about -0.08 per unit of risk. If you would invest  55,400  in mBank SA on September 4, 2024 and sell it today you would lose (900.00) from holding mBank SA or give up 1.62% of portfolio value over 90 days.

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

mBank SA  vs.  11 bit studios

mBank SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days mBank SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

11 bit studios

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 11 bit studios has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with MBank SA and 11 Bit

The main advantage of trading using opposite MBank SA and 11 Bit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBank SA position performs unexpectedly, 11 Bit 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 11 Bit will offset losses from the drop in 11 Bit's long position.

The idea behind mBank SA and 11 bit studios 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.