Correlation Between Multi Retail and Bio View
Can any of the company-specific risk be diversified away by investing in both Multi Retail and Bio View 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 Multi Retail and Bio View into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Retail Group and Bio View, you can compare the effects of market volatilities on Multi Retail and Bio View 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 Multi Retail with a short position of Bio View. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Retail and Bio View.
Diversification Opportunities for Multi Retail and Bio View
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Multi and Bio is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Multi Retail Group and Bio View in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio View and Multi Retail 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 Multi Retail Group are associated (or correlated) with Bio View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio View has no effect on the direction of Multi Retail i.e., Multi Retail and Bio View go up and down completely randomly.
Pair Corralation between Multi Retail and Bio View
Assuming the 90 days trading horizon Multi Retail Group is expected to generate 0.6 times more return on investment than Bio View. However, Multi Retail Group is 1.67 times less risky than Bio View. It trades about 0.12 of its potential returns per unit of risk. Bio View is currently generating about 0.02 per unit of risk. If you would invest 113,500 in Multi Retail Group on December 28, 2024 and sell it today you would earn a total of 15,800 from holding Multi Retail Group or generate 13.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.08% |
Values | Daily Returns |
Multi Retail Group vs. Bio View
Performance |
Timeline |
Multi Retail Group |
Bio View |
Multi Retail and Bio View Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multi Retail and Bio View
The main advantage of trading using opposite Multi Retail and Bio View positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Retail position performs unexpectedly, Bio View 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 Bio View will offset losses from the drop in Bio View's long position.Multi Retail vs. Human Xtensions | Multi Retail vs. Israel Discount Bank | Multi Retail vs. Citrus Plant5 L | Multi Retail vs. Icon Group |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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