Correlation Between Randon SA and Mangels Industrial

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

By analyzing existing cross correlation between Randon SA Implementos and Mangels Industrial SA, you can compare the effects of market volatilities on Randon SA and Mangels Industrial 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 Randon SA with a short position of Mangels Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Randon SA and Mangels Industrial.

Diversification Opportunities for Randon SA and Mangels Industrial

-0.43

Correlation Coefficient

Randon SA  Mangels Industrial

Very good diversification

The 3 months correlation between Randon and Mangels is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Randon SA Implementos and Mangels Industrial SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mangels Industrial and Randon SA 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 Randon SA Implementos are associated (or correlated) with Mangels Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mangels Industrial has no effect on the direction of Randon SA i.e., Randon SA and Mangels Industrial go up and down completely randomly.

Pair Corralation between Randon SA and Mangels Industrial

Assuming the 90 days trading horizon Randon SA Implementos is expected to generate 0.5 times more return on investment than Mangels Industrial. However, Randon SA Implementos is 1.99 times less risky than Mangels Industrial. It trades about 0.03 of its potential returns per unit of risk. Mangels Industrial SA is currently generating about 0.0 per unit of risk. If you would invest  829.00  in Randon SA Implementos on December 24, 2024 and sell it today you would earn a total of  23.00  from holding Randon SA Implementos or generate 2.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Randon SA Implementos  vs.  Mangels Industrial SA

Randon SA Implementos

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Randon SA Implementos are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Randon SA is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Mangels Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mangels Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mangels Industrial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Randon SA and Mangels Industrial

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

The idea behind Randon SA Implementos and Mangels Industrial SA 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.