Correlation Between Gruppo Mutuionline and PEPKOR

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

Diversification Opportunities for Gruppo Mutuionline and PEPKOR

0.54

Correlation Coefficient

Gruppo Mutuionline  PEPKOR

Very weak diversification

The 3 months correlation between Gruppo and PEPKOR is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo Mutuionline SpA and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD 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 PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of Gruppo Mutuionline i.e., Gruppo Mutuionline and PEPKOR go up and down completely randomly.

Pair Corralation between Gruppo Mutuionline and PEPKOR

Assuming the 90 days trading horizon Gruppo Mutuionline SpA is expected to generate 0.52 times more return on investment than PEPKOR. However, Gruppo Mutuionline SpA is 1.93 times less risky than PEPKOR. It trades about 0.0 of its potential returns per unit of risk. PEPKOR LTD is currently generating about -0.01 per unit of risk. If you would invest  3,680  in Gruppo Mutuionline SpA on October 9, 2024 and sell it today you would lose (15.00) from holding Gruppo Mutuionline SpA or give up 0.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.12%
Values	Daily Returns

Gruppo Mutuionline SpA  vs.  PEPKOR LTD

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.

PEPKOR LTD

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PEPKOR LTD are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PEPKOR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gruppo Mutuionline and PEPKOR

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

The idea behind Gruppo Mutuionline SpA and PEPKOR LTD 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.