Correlation Between Mirrabooka Investments and Multistack International

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

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

Diversification Opportunities for Mirrabooka Investments and Multistack International

0.0

Correlation Coefficient

Mirrabooka Investments  Multistack International

Pay attention - limited upside

The 3 months correlation between Mirrabooka and Multistack is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mirrabooka Investments and Multistack International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multistack International and Mirrabooka Investments 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 Mirrabooka Investments are associated (or correlated) with Multistack International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multistack International has no effect on the direction of Mirrabooka Investments i.e., Mirrabooka Investments and Multistack International go up and down completely randomly.

Pair Corralation between Mirrabooka Investments and Multistack International

Assuming the 90 days trading horizon Mirrabooka Investments is expected to generate 204.11 times less return on investment than Multistack International. But when comparing it to its historical volatility, Mirrabooka Investments is 104.43 times less risky than Multistack International. It trades about 0.05 of its potential returns per unit of risk. Multistack International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1.20  in Multistack International on October 10, 2024 and sell it today you would lose (0.80) from holding Multistack International or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.01%
Values	Daily Returns

Mirrabooka Investments  vs.  Multistack International

Mirrabooka Investments

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mirrabooka Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Mirrabooka Investments is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Multistack International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Multistack International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Multistack International is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mirrabooka Investments and Multistack International

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

The idea behind Mirrabooka Investments and Multistack International 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.