Correlation Between MCI Management and Logintrade

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

Diversification Opportunities for MCI Management and Logintrade

-0.73

Correlation Coefficient

MCI Management  Logintrade

Pay attention - limited upside

The 3 months correlation between MCI and Logintrade is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and Logintrade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logintrade 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 Logintrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logintrade SA has no effect on the direction of MCI Management i.e., MCI Management and Logintrade go up and down completely randomly.

Pair Corralation between MCI Management and Logintrade

Assuming the 90 days trading horizon MCI Management SA is expected to under-perform the Logintrade. But the stock apears to be less risky and, when comparing its historical volatility, MCI Management SA is 5.48 times less risky than Logintrade. The stock trades about -0.21 of its potential returns per unit of risk. The Logintrade SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  370.00  in Logintrade SA on October 11, 2024 and sell it today you would earn a total of  28.00  from holding Logintrade SA or generate 7.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	75.0%
Values	Daily Returns

MCI Management SA  vs.  Logintrade SA

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.

Logintrade SA

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Logintrade SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Logintrade reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MCI Management and Logintrade

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

The idea behind MCI Management SA and Logintrade 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.