Correlation Between MBank SA and Marie Brizard

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

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

Diversification Opportunities for MBank SA and Marie Brizard

-0.08

Correlation Coefficient

MBank SA  Marie Brizard

Good diversification

The 3 months correlation between MBank and Marie is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and Marie Brizard Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marie Brizard Wine 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 Marie Brizard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marie Brizard Wine has no effect on the direction of MBank SA i.e., MBank SA and Marie Brizard go up and down completely randomly.

Pair Corralation between MBank SA and Marie Brizard

Assuming the 90 days trading horizon mBank SA is expected to under-perform the Marie Brizard. But the stock apears to be less risky and, when comparing its historical volatility, mBank SA is 1.24 times less risky than Marie Brizard. The stock trades about -0.07 of its potential returns per unit of risk. The Marie Brizard Wine is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,465  in Marie Brizard Wine on September 23, 2024 and sell it today you would earn a total of  75.00  from holding Marie Brizard Wine or generate 5.12% return on investment over 90 days.

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

mBank SA  vs.  Marie Brizard Wine

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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Marie Brizard Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marie Brizard Wine has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Marie Brizard 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 Marie Brizard

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

The idea behind mBank SA and Marie Brizard Wine 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.