Correlation Between Gruppo Mutuionline and PARKWAY LIFE

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

By analyzing existing cross correlation between Gruppo Mutuionline SpA and PARKWAY LIFE REAL, you can compare the effects of market volatilities on Gruppo Mutuionline and PARKWAY LIFE 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 Gruppo Mutuionline with a short position of PARKWAY LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruppo Mutuionline and PARKWAY LIFE.

Diversification Opportunities for Gruppo Mutuionline and PARKWAY LIFE

-0.37

Correlation Coefficient

Gruppo Mutuionline  PARKWAY LIFE

Very good diversification

The 3 months correlation between Gruppo and PARKWAY is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo Mutuionline SpA and PARKWAY LIFE REAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKWAY LIFE REAL and Gruppo Mutuionline 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 Gruppo Mutuionline SpA are associated (or correlated) with PARKWAY LIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKWAY LIFE REAL has no effect on the direction of Gruppo Mutuionline i.e., Gruppo Mutuionline and PARKWAY LIFE go up and down completely randomly.

Pair Corralation between Gruppo Mutuionline and PARKWAY LIFE

Assuming the 90 days trading horizon Gruppo Mutuionline is expected to generate 2.7 times less return on investment than PARKWAY LIFE. But when comparing it to its historical volatility, Gruppo Mutuionline SpA is 1.07 times less risky than PARKWAY LIFE. It trades about 0.02 of its potential returns per unit of risk. PARKWAY LIFE REAL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  230.00  in PARKWAY LIFE REAL on October 9, 2024 and sell it today you would earn a total of  44.00  from holding PARKWAY LIFE REAL or generate 19.13% return on investment over 90 days.

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

Gruppo Mutuionline SpA  vs.  PARKWAY LIFE REAL

Gruppo Mutuionline SpA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gruppo Mutuionline SpA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Gruppo Mutuionline unveiled solid returns over the last few months and may actually be approaching a breakup point.

PARKWAY LIFE REAL

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PARKWAY LIFE REAL are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, PARKWAY LIFE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Gruppo Mutuionline and PARKWAY LIFE

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

The idea behind Gruppo Mutuionline SpA and PARKWAY LIFE REAL 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.

Check out your portfolio center.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.