Correlation Between Meso Numismatics and Ceconomy

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

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

Diversification Opportunities for Meso Numismatics and Ceconomy

0.09

Correlation Coefficient

Meso Numismatics  Ceconomy

Significant diversification

The 3 months correlation between Meso and Ceconomy is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Meso Numismatics and Ceconomy AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceconomy AG ADR and Meso Numismatics 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 Meso Numismatics are associated (or correlated) with Ceconomy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceconomy AG ADR has no effect on the direction of Meso Numismatics i.e., Meso Numismatics and Ceconomy go up and down completely randomly.

Pair Corralation between Meso Numismatics and Ceconomy

Given the investment horizon of 90 days Meso Numismatics is expected to under-perform the Ceconomy. In addition to that, Meso Numismatics is 2.36 times more volatile than Ceconomy AG ADR. It trades about -0.53 of its total potential returns per unit of risk. Ceconomy AG ADR is currently generating about 0.05 per unit of volatility. If you would invest  47.00  in Ceconomy AG ADR on October 24, 2024 and sell it today you would earn a total of  1.00  from holding Ceconomy AG ADR or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	50.0%
Values	Daily Returns

Meso Numismatics  vs.  Ceconomy AG ADR

Meso Numismatics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meso Numismatics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Ceconomy AG ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ceconomy AG ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Meso Numismatics and Ceconomy

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

The idea behind Meso Numismatics and Ceconomy AG ADR 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.