Correlation Between Mosaic and SCHMID Group

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

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

Diversification Opportunities for Mosaic and SCHMID Group

-0.22

Correlation Coefficient

Mosaic  SCHMID Group

Very good diversification

The 3 months correlation between Mosaic and SCHMID is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and SCHMID Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCHMID Group NV and Mosaic 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 The Mosaic are associated (or correlated) with SCHMID Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCHMID Group NV has no effect on the direction of Mosaic i.e., Mosaic and SCHMID Group go up and down completely randomly.

Pair Corralation between Mosaic and SCHMID Group

Considering the 90-day investment horizon The Mosaic is expected to under-perform the SCHMID Group. But the stock apears to be less risky and, when comparing its historical volatility, The Mosaic is 8.09 times less risky than SCHMID Group. The stock trades about -0.04 of its potential returns per unit of risk. The SCHMID Group NV is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  23.00  in SCHMID Group NV on October 12, 2024 and sell it today you would earn a total of  1.00  from holding SCHMID Group NV or generate 4.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.7%
Values	Daily Returns

The Mosaic  vs.  SCHMID Group NV

Mosaic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Mosaic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mosaic is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

SCHMID Group NV

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCHMID Group NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, SCHMID Group showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mosaic and SCHMID Group

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

The idea behind The Mosaic and SCHMID Group NV 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.