Correlation Between Gruppo Mutuionline and CyberAgent

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

Diversification Opportunities for Gruppo Mutuionline and CyberAgent

0.65

Correlation Coefficient

Gruppo Mutuionline  CyberAgent

Poor diversification

The 3 months correlation between Gruppo and CyberAgent is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo Mutuionline SpA and CyberAgent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberAgent 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 CyberAgent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberAgent has no effect on the direction of Gruppo Mutuionline i.e., Gruppo Mutuionline and CyberAgent go up and down completely randomly.

Pair Corralation between Gruppo Mutuionline and CyberAgent

Assuming the 90 days trading horizon Gruppo Mutuionline SpA is expected to generate 1.04 times more return on investment than CyberAgent. However, Gruppo Mutuionline is 1.04 times more volatile than CyberAgent. It trades about 0.04 of its potential returns per unit of risk. CyberAgent is currently generating about 0.01 per unit of risk. If you would invest  3,380  in Gruppo Mutuionline SpA on October 13, 2024 and sell it today you would earn a total of  115.00  from holding Gruppo Mutuionline SpA or generate 3.4% return on investment over 90 days.

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

Gruppo Mutuionline SpA  vs.  CyberAgent

Gruppo Mutuionline SpA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gruppo Mutuionline SpA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Gruppo Mutuionline is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CyberAgent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CyberAgent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CyberAgent 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 CyberAgent

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

The idea behind Gruppo Mutuionline SpA and CyberAgent 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.