Correlation Between MPX International and Slang Worldwide

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

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

Diversification Opportunities for MPX International and Slang Worldwide

0.38

Correlation Coefficient

MPX International  Slang Worldwide

Weak diversification

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

Pair Corralation between MPX International and Slang Worldwide

If you would invest  0.11  in MPX International Corp on December 20, 2024 and sell it today you would lose (0.10) from holding MPX International Corp or give up 90.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	63.33%
Values	Daily Returns

MPX International Corp  vs.  Slang Worldwide

MPX International Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MPX International Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MPX International reported solid returns over the last few months and may actually be approaching a breakup point.

Slang Worldwide

Risk-Adjusted Performance

Very Weak

Over the last 90 days Slang Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Slang Worldwide is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MPX International and Slang Worldwide

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

The idea behind MPX International Corp and Slang Worldwide 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.