Correlation Between MCI Management and Agroton Public

Can any of the company-specific risk be diversified away by investing in both MCI Management and Agroton Public 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 MCI Management and Agroton Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MCI Management SA and Agroton Public, you can compare the effects of market volatilities on MCI Management and Agroton Public 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 MCI Management with a short position of Agroton Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and Agroton Public.

Diversification Opportunities for MCI Management and Agroton Public

-0.22

Correlation Coefficient

MCI Management  Agroton Public

Very good diversification

The 3 months correlation between MCI and Agroton is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and Agroton Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agroton Public and MCI Management 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 MCI Management SA are associated (or correlated) with Agroton Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agroton Public has no effect on the direction of MCI Management i.e., MCI Management and Agroton Public go up and down completely randomly.

Pair Corralation between MCI Management and Agroton Public

Assuming the 90 days trading horizon MCI Management SA is expected to under-perform the Agroton Public. But the stock apears to be less risky and, when comparing its historical volatility, MCI Management SA is 2.24 times less risky than Agroton Public. The stock trades about -0.15 of its potential returns per unit of risk. The Agroton Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  376.00  in Agroton Public on October 7, 2024 and sell it today you would earn a total of  19.00  from holding Agroton Public or generate 5.05% return on investment over 90 days.

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

MCI Management SA  vs.  Agroton Public

MCI Management SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCI Management 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.

Agroton Public

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agroton Public are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Agroton Public may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with MCI Management and Agroton Public

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

The idea behind MCI Management SA and Agroton Public 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.