Correlation Between MCI Management and Baked Games

Can any of the company-specific risk be diversified away by investing in both MCI Management and Baked 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 MCI Management and Baked Games 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 Baked Games SA, you can compare the effects of market volatilities on MCI Management and Baked 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 MCI Management with a short position of Baked Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and Baked Games.

Diversification Opportunities for MCI Management and Baked Games

0.59

Correlation Coefficient

MCI Management  Baked Games

Very weak diversification

The 3 months correlation between MCI and Baked is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and Baked Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baked Games SA 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 Baked Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baked Games SA has no effect on the direction of MCI Management i.e., MCI Management and Baked Games go up and down completely randomly.

Pair Corralation between MCI Management and Baked Games

Assuming the 90 days trading horizon MCI Management is expected to generate 2.04 times less return on investment than Baked Games. But when comparing it to its historical volatility, MCI Management SA is 3.71 times less risky than Baked Games. It trades about 0.04 of its potential returns per unit of risk. Baked Games SA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  312.00  in Baked Games SA on December 2, 2024 and sell it today you would lose (4.00) from holding Baked Games SA or give up 1.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

MCI Management SA  vs.  Baked Games SA

MCI Management SA

Risk-Adjusted Performance

Insignificant

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

Baked Games SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Baked Games SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Baked Games may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with MCI Management and Baked Games

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

The idea behind MCI Management SA and Baked 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.