Correlation Between Mecanica Fina and Remarul 16

Can any of the company-specific risk be diversified away by investing in both Mecanica Fina and Remarul 16 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 Mecanica Fina and Remarul 16 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mecanica Fina SA and Remarul 16 Februarie, you can compare the effects of market volatilities on Mecanica Fina and Remarul 16 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 Mecanica Fina with a short position of Remarul 16. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mecanica Fina and Remarul 16.

Diversification Opportunities for Mecanica Fina and Remarul 16

-0.12

Correlation Coefficient

Mecanica Fina  Remarul 16

Good diversification

The 3 months correlation between Mecanica and Remarul is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mecanica Fina SA and Remarul 16 Februarie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remarul 16 Februarie and Mecanica Fina 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 Mecanica Fina SA are associated (or correlated) with Remarul 16. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remarul 16 Februarie has no effect on the direction of Mecanica Fina i.e., Mecanica Fina and Remarul 16 go up and down completely randomly.

Pair Corralation between Mecanica Fina and Remarul 16

Assuming the 90 days trading horizon Mecanica Fina SA is expected to under-perform the Remarul 16. In addition to that, Mecanica Fina is 9.99 times more volatile than Remarul 16 Februarie. It trades about -0.15 of its total potential returns per unit of risk. Remarul 16 Februarie is currently generating about 0.06 per unit of volatility. If you would invest  2,700  in Remarul 16 Februarie on September 5, 2024 and sell it today you would earn a total of  20.00  from holding Remarul 16 Februarie or generate 0.74% return on investment over 90 days.

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

Mecanica Fina SA  vs.  Remarul 16 Februarie

Mecanica Fina SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mecanica Fina SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Remarul 16 Februarie

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Remarul 16 Februarie are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Remarul 16 is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mecanica Fina and Remarul 16

The main advantage of trading using opposite Mecanica Fina and Remarul 16 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mecanica Fina position performs unexpectedly, Remarul 16 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 Remarul 16 will offset losses from the drop in Remarul 16's long position.

The idea behind Mecanica Fina SA and Remarul 16 Februarie 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.