Correlation Between MICRONIC MYDATA and Prosus NV

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

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

Diversification Opportunities for MICRONIC MYDATA and Prosus NV

-0.26

Correlation Coefficient

MICRONIC MYDATA  Prosus NV

Very good diversification

The 3 months correlation between MICRONIC and Prosus is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding MICRONIC MYDATA and Prosus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV and MICRONIC MYDATA 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 MICRONIC MYDATA are associated (or correlated) with Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV has no effect on the direction of MICRONIC MYDATA i.e., MICRONIC MYDATA and Prosus NV go up and down completely randomly.

Pair Corralation between MICRONIC MYDATA and Prosus NV

Assuming the 90 days trading horizon MICRONIC MYDATA is expected to generate 1.28 times more return on investment than Prosus NV. However, MICRONIC MYDATA is 1.28 times more volatile than Prosus NV. It trades about 0.1 of its potential returns per unit of risk. Prosus NV is currently generating about 0.06 per unit of risk. If you would invest  2,209  in MICRONIC MYDATA on October 26, 2024 and sell it today you would earn a total of  1,641  from holding MICRONIC MYDATA or generate 74.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

MICRONIC MYDATA  vs.  Prosus NV

MICRONIC MYDATA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MICRONIC MYDATA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, MICRONIC MYDATA is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Prosus NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosus NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with MICRONIC MYDATA and Prosus NV

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

The idea behind MICRONIC MYDATA and Prosus NV 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.