Correlation Between MTI Investment and Cinis Fertilizer

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

By analyzing existing cross correlation between MTI Investment SE and Cinis Fertilizer AB, you can compare the effects of market volatilities on MTI Investment and Cinis Fertilizer 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 MTI Investment with a short position of Cinis Fertilizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI Investment and Cinis Fertilizer.

Diversification Opportunities for MTI Investment and Cinis Fertilizer

0.88

Correlation Coefficient

MTI Investment  Cinis Fertilizer

Very poor diversification

The 3 months correlation between MTI and Cinis is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding MTI Investment SE and Cinis Fertilizer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinis Fertilizer and MTI Investment 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 MTI Investment SE are associated (or correlated) with Cinis Fertilizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinis Fertilizer has no effect on the direction of MTI Investment i.e., MTI Investment and Cinis Fertilizer go up and down completely randomly.

Pair Corralation between MTI Investment and Cinis Fertilizer

Assuming the 90 days trading horizon MTI Investment SE is expected to generate 0.44 times more return on investment than Cinis Fertilizer. However, MTI Investment SE is 2.28 times less risky than Cinis Fertilizer. It trades about -0.54 of its potential returns per unit of risk. Cinis Fertilizer AB is currently generating about -0.47 per unit of risk. If you would invest  100.00  in MTI Investment SE on October 26, 2024 and sell it today you would lose (18.00) from holding MTI Investment SE or give up 18.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	94.44%
Values	Daily Returns

MTI Investment SE  vs.  Cinis Fertilizer AB

MTI Investment SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MTI Investment SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Cinis Fertilizer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cinis Fertilizer AB 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 comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with MTI Investment and Cinis Fertilizer

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

The idea behind MTI Investment SE and Cinis Fertilizer AB 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.