Correlation Between Mtropole Tlvision and Esso SAF

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

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

Diversification Opportunities for Mtropole Tlvision and Esso SAF

0.79

Correlation Coefficient

Mtropole Tlvision  Esso SAF

Poor diversification

The 3 months correlation between Mtropole and Esso is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mtropole Tlvision SA and Esso SAF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esso SAF and Mtropole Tlvision 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 Mtropole Tlvision SA are associated (or correlated) with Esso SAF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esso SAF has no effect on the direction of Mtropole Tlvision i.e., Mtropole Tlvision and Esso SAF go up and down completely randomly.

Pair Corralation between Mtropole Tlvision and Esso SAF

Assuming the 90 days trading horizon Mtropole Tlvision SA is expected to generate 0.73 times more return on investment than Esso SAF. However, Mtropole Tlvision SA is 1.38 times less risky than Esso SAF. It trades about 0.11 of its potential returns per unit of risk. Esso SAF is currently generating about -0.09 per unit of risk. If you would invest  1,094  in Mtropole Tlvision SA on September 17, 2024 and sell it today you would earn a total of  28.00  from holding Mtropole Tlvision SA or generate 2.56% return on investment over 90 days.

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

Mtropole Tlvision SA  vs.  Esso SAF

Mtropole Tlvision

Risk-Adjusted Performance

0 of 100

Very Weak

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

Esso SAF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Esso SAF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic 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 Mtropole Tlvision and Esso SAF

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

The idea behind Mtropole Tlvision SA and Esso SAF 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.