Correlation Between MTI Wireless and MOL Hungarian

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

By analyzing existing cross correlation between MTI Wireless Edge and MOL Hungarian Oil, you can compare the effects of market volatilities on MTI Wireless and MOL Hungarian 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 Wireless with a short position of MOL Hungarian. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTI Wireless and MOL Hungarian.

Diversification Opportunities for MTI Wireless and MOL Hungarian

-0.02

Correlation Coefficient

MTI Wireless  MOL Hungarian

Good diversification

The 3 months correlation between MTI and MOL is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MTI Wireless Edge and MOL Hungarian Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL Hungarian Oil and MTI Wireless 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 Wireless Edge are associated (or correlated) with MOL Hungarian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL Hungarian Oil has no effect on the direction of MTI Wireless i.e., MTI Wireless and MOL Hungarian go up and down completely randomly.

Pair Corralation between MTI Wireless and MOL Hungarian

If you would invest  4,300  in MTI Wireless Edge on October 24, 2024 and sell it today you would earn a total of  1,000.00  from holding MTI Wireless Edge or generate 23.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MTI Wireless Edge  vs.  MOL Hungarian Oil

MTI Wireless Edge

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MTI Wireless Edge are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, MTI Wireless exhibited solid returns over the last few months and may actually be approaching a breakup point.

MOL Hungarian Oil

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MOL Hungarian Oil are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MOL Hungarian is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MTI Wireless and MOL Hungarian

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

The idea behind MTI Wireless Edge and MOL Hungarian Oil 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.