Correlation Between Rubis SCA and Mtropole Tlvision

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

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

Diversification Opportunities for Rubis SCA and Mtropole Tlvision

0.87

Correlation Coefficient

Rubis SCA  Mtropole Tlvision

Very poor diversification

The 3 months correlation between Rubis and Mtropole is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Rubis SCA and Mtropole Tlvision SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mtropole Tlvision and Rubis SCA 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 Rubis SCA are associated (or correlated) with Mtropole Tlvision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mtropole Tlvision has no effect on the direction of Rubis SCA i.e., Rubis SCA and Mtropole Tlvision go up and down completely randomly.

Pair Corralation between Rubis SCA and Mtropole Tlvision

Assuming the 90 days trading horizon Rubis SCA is expected to generate 1.9 times less return on investment than Mtropole Tlvision. In addition to that, Rubis SCA is 1.91 times more volatile than Mtropole Tlvision SA. It trades about 0.11 of its total potential returns per unit of risk. Mtropole Tlvision SA is currently generating about 0.39 per unit of volatility. If you would invest  1,110  in Mtropole Tlvision SA on December 30, 2024 and sell it today you would earn a total of  302.00  from holding Mtropole Tlvision SA or generate 27.21% return on investment over 90 days.

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

Rubis SCA  vs.  Mtropole Tlvision SA

Rubis SCA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rubis SCA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Rubis SCA may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Mtropole Tlvision

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Mtropole Tlvision SA are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mtropole Tlvision sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rubis SCA and Mtropole Tlvision

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

The idea behind Rubis SCA and Mtropole Tlvision 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.