Correlation Between Mtropole Tlvision and SPIE SA

Can any of the company-specific risk be diversified away by investing in both Mtropole Tlvision and SPIE SA 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 SPIE SA 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 SPIE SA, you can compare the effects of market volatilities on Mtropole Tlvision and SPIE SA 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 SPIE SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mtropole Tlvision and SPIE SA.

Diversification Opportunities for Mtropole Tlvision and SPIE SA

0.93

Correlation Coefficient

Mtropole Tlvision  SPIE SA

Almost no diversification

The 3 months correlation between Mtropole and SPIE is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mtropole Tlvision SA and SPIE SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPIE SA 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 SPIE SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPIE SA has no effect on the direction of Mtropole Tlvision i.e., Mtropole Tlvision and SPIE SA go up and down completely randomly.

Pair Corralation between Mtropole Tlvision and SPIE SA

Assuming the 90 days trading horizon Mtropole Tlvision SA is expected to generate 0.82 times more return on investment than SPIE SA. However, Mtropole Tlvision SA is 1.22 times less risky than SPIE SA. It trades about 0.11 of its potential returns per unit of risk. SPIE SA is currently generating about -0.13 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	Very Strong
Accuracy	100.0%
Values	Daily Returns

Mtropole Tlvision SA  vs.  SPIE SA

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.

SPIE SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPIE SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mtropole Tlvision and SPIE SA

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

The idea behind Mtropole Tlvision SA and SPIE 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.