Correlation Between Minesto AB and Maha Energy

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

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

Diversification Opportunities for Minesto AB and Maha Energy

-0.32

Correlation Coefficient

Minesto AB  Maha Energy

Very good diversification

The 3 months correlation between Minesto and Maha is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Minesto AB and Maha Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maha Energy AB and Minesto AB 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 Minesto AB are associated (or correlated) with Maha Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maha Energy AB has no effect on the direction of Minesto AB i.e., Minesto AB and Maha Energy go up and down completely randomly.

Pair Corralation between Minesto AB and Maha Energy

Assuming the 90 days trading horizon Minesto AB is expected to generate 1.88 times more return on investment than Maha Energy. However, Minesto AB is 1.88 times more volatile than Maha Energy AB. It trades about 0.05 of its potential returns per unit of risk. Maha Energy AB is currently generating about -0.06 per unit of risk. If you would invest  281.00  in Minesto AB on September 12, 2024 and sell it today you would earn a total of  25.00  from holding Minesto AB or generate 8.9% return on investment over 90 days.

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

Minesto AB  vs.  Maha Energy AB

Minesto AB

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Minesto AB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Minesto AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Maha Energy AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maha Energy AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Minesto AB and Maha Energy

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

The idea behind Minesto AB and Maha Energy AB 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.