Correlation Between MLP Group and Logintrade

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

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

Diversification Opportunities for MLP Group and Logintrade

0.58

Correlation Coefficient

MLP Group  Logintrade

Very weak diversification

The 3 months correlation between MLP and Logintrade is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding MLP Group SA and Logintrade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logintrade SA and MLP Group 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 MLP Group 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 MLP Group i.e., MLP Group and Logintrade go up and down completely randomly.

Pair Corralation between MLP Group and Logintrade

Assuming the 90 days trading horizon MLP Group SA is expected to generate 0.42 times more return on investment than Logintrade. However, MLP Group SA is 2.36 times less risky than Logintrade. It trades about 0.18 of its potential returns per unit of risk. Logintrade SA is currently generating about 0.04 per unit of risk. If you would invest  6,800  in MLP Group SA on December 30, 2024 and sell it today you would earn a total of  1,960  from holding MLP Group SA or generate 28.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	49.21%
Values	Daily Returns

MLP Group SA  vs.  Logintrade SA

MLP Group SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MLP Group SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, MLP Group reported solid returns over the last few months and may actually be approaching a breakup point.

Logintrade SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Logintrade SA are ranked lower than 3 (%) 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 MLP Group and Logintrade

The main advantage of trading using opposite MLP Group and Logintrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MLP Group 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 MLP Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.