Correlation Between MBank SA and Property Lease

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

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

Diversification Opportunities for MBank SA and Property Lease

0.0

Correlation Coefficient

MBank SA  Property Lease

Pay attention - limited upside

The 3 months correlation between MBank and Property is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding mBank SA and Property Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Property Lease 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 Property Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Property Lease has no effect on the direction of MBank SA i.e., MBank SA and Property Lease go up and down completely randomly.

Pair Corralation between MBank SA and Property Lease

If you would invest  54,720  in mBank SA on December 28, 2024 and sell it today you would earn a total of  28,820  from holding mBank SA or generate 52.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

mBank SA  vs.  Property Lease

mBank SA

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in mBank SA are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, MBank SA reported solid returns over the last few months and may actually be approaching a breakup point.

Property Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Property Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Property Lease is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MBank SA and Property Lease

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

The idea behind mBank SA and Property Lease 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.