Correlation Between Din Capital and Mobile World

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

By analyzing existing cross correlation between Din Capital Investment and Mobile World Investment, you can compare the effects of market volatilities on Din Capital and Mobile World 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 Din Capital with a short position of Mobile World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Din Capital and Mobile World.

Diversification Opportunities for Din Capital and Mobile World

-0.84

Correlation Coefficient

Din Capital  Mobile World

Pay attention - limited upside

The 3 months correlation between Din and Mobile is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Din Capital Investment and Mobile World Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile World Investment and Din Capital 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 Din Capital Investment are associated (or correlated) with Mobile World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile World Investment has no effect on the direction of Din Capital i.e., Din Capital and Mobile World go up and down completely randomly.

Pair Corralation between Din Capital and Mobile World

Assuming the 90 days trading horizon Din Capital is expected to generate 1.28 times less return on investment than Mobile World. In addition to that, Din Capital is 1.19 times more volatile than Mobile World Investment. It trades about 0.02 of its total potential returns per unit of risk. Mobile World Investment is currently generating about 0.04 per unit of volatility. If you would invest  5,158,991  in Mobile World Investment on October 9, 2024 and sell it today you would earn a total of  541,009  from holding Mobile World Investment or generate 10.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	91.94%
Values	Daily Returns

Din Capital Investment  vs.  Mobile World Investment

Din Capital Investment

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Din Capital Investment are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Din Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Mobile World Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mobile World Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Din Capital and Mobile World

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

The idea behind Din Capital Investment and Mobile World Investment 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.