Correlation Between Mlk Foods and Cloud Technologies

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

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

Diversification Opportunities for Mlk Foods and Cloud Technologies

-0.25

Correlation Coefficient

Mlk Foods  Cloud Technologies

Very good diversification

The 3 months correlation between Mlk and Cloud is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Mlk Foods Public and Cloud Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Technologies and Mlk Foods 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 Mlk Foods Public are associated (or correlated) with Cloud Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Technologies has no effect on the direction of Mlk Foods i.e., Mlk Foods and Cloud Technologies go up and down completely randomly.

Pair Corralation between Mlk Foods and Cloud Technologies

Assuming the 90 days trading horizon Mlk Foods Public is expected to generate 0.69 times more return on investment than Cloud Technologies. However, Mlk Foods Public is 1.44 times less risky than Cloud Technologies. It trades about 0.33 of its potential returns per unit of risk. Cloud Technologies SA is currently generating about 0.01 per unit of risk. If you would invest  114.00  in Mlk Foods Public on October 10, 2024 and sell it today you would earn a total of  17.00  from holding Mlk Foods Public or generate 14.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

Mlk Foods Public  vs.  Cloud Technologies SA

Mlk Foods Public

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mlk Foods Public are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Mlk Foods reported solid returns over the last few months and may actually be approaching a breakup point.

Cloud Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cloud Technologies SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Mlk Foods and Cloud Technologies

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

The idea behind Mlk Foods Public and Cloud Technologies 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.