Correlation Between Micromobility and Conrad Industries

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

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

Diversification Opportunities for Micromobility and Conrad Industries

0.8

Correlation Coefficient

Micromobility  Conrad Industries

Very poor diversification

The 3 months correlation between Micromobility and Conrad is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Micromobility and Conrad Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conrad Industries and Micromobility 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 Micromobility are associated (or correlated) with Conrad Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conrad Industries has no effect on the direction of Micromobility i.e., Micromobility and Conrad Industries go up and down completely randomly.

Pair Corralation between Micromobility and Conrad Industries

If you would invest  1,030  in Conrad Industries on September 29, 2024 and sell it today you would earn a total of  0.00  from holding Conrad Industries or generate 0.0% return on investment over 90 days.

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

Micromobility  vs.  Conrad Industries

Micromobility

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micromobility has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable primary indicators, Micromobility is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Conrad Industries

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Micromobility and Conrad Industries

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

The idea behind Micromobility and Conrad Industries 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.