Correlation Between MBank SA and Creativeforge Games

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

By analyzing existing cross correlation between mBank SA and Creativeforge Games SA, you can compare the effects of market volatilities on MBank SA and Creativeforge Games 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 Creativeforge Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBank SA and Creativeforge Games.

Diversification Opportunities for MBank SA and Creativeforge Games

0.36

Correlation Coefficient

MBank SA  Creativeforge Games

Weak diversification

The 3 months correlation between MBank and Creativeforge is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and Creativeforge Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creativeforge Games 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 Creativeforge Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creativeforge Games has no effect on the direction of MBank SA i.e., MBank SA and Creativeforge Games go up and down completely randomly.

Pair Corralation between MBank SA and Creativeforge Games

Assuming the 90 days trading horizon MBank SA is expected to generate 1.35 times less return on investment than Creativeforge Games. But when comparing it to its historical volatility, mBank SA is 2.01 times less risky than Creativeforge Games. It trades about 0.32 of its potential returns per unit of risk. Creativeforge Games SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  187.00  in Creativeforge Games SA on October 27, 2024 and sell it today you would earn a total of  22.00  from holding Creativeforge Games SA or generate 11.76% return on investment over 90 days.

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

mBank SA  vs.  Creativeforge Games SA

mBank SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in mBank SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, MBank SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Creativeforge Games

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Creativeforge Games SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Creativeforge Games is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with MBank SA and Creativeforge Games

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

The idea behind mBank SA and Creativeforge Games 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.