Correlation Between MOL Nyrt and AutoWallis Nyrt

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

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

Diversification Opportunities for MOL Nyrt and AutoWallis Nyrt

0.38

Correlation Coefficient

MOL Nyrt  AutoWallis Nyrt

Weak diversification

The 3 months correlation between MOL and AutoWallis is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MOL Nyrt and AutoWallis Nyrt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoWallis Nyrt and MOL Nyrt 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 MOL Nyrt are associated (or correlated) with AutoWallis Nyrt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoWallis Nyrt has no effect on the direction of MOL Nyrt i.e., MOL Nyrt and AutoWallis Nyrt go up and down completely randomly.

Pair Corralation between MOL Nyrt and AutoWallis Nyrt

Assuming the 90 days trading horizon MOL Nyrt is expected to generate 2.02 times less return on investment than AutoWallis Nyrt. But when comparing it to its historical volatility, MOL Nyrt is 1.44 times less risky than AutoWallis Nyrt. It trades about 0.05 of its potential returns per unit of risk. AutoWallis Nyrt is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  14,500  in AutoWallis Nyrt on September 15, 2024 and sell it today you would earn a total of  800.00  from holding AutoWallis Nyrt or generate 5.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

MOL Nyrt  vs.  AutoWallis Nyrt

MOL Nyrt

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOL Nyrt are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, MOL Nyrt is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

AutoWallis Nyrt

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AutoWallis Nyrt are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AutoWallis Nyrt is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MOL Nyrt and AutoWallis Nyrt

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

The idea behind MOL Nyrt and AutoWallis Nyrt 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.