Correlation Between SCHMID Group and Mosaic

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

By analyzing existing cross correlation between SCHMID Group NV and The Mosaic, you can compare the effects of market volatilities on SCHMID Group and Mosaic 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 SCHMID Group with a short position of Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCHMID Group and Mosaic.

Diversification Opportunities for SCHMID Group and Mosaic

-0.22

Correlation Coefficient

SCHMID Group  Mosaic

Very good diversification

The 3 months correlation between SCHMID and Mosaic is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding SCHMID Group NV and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic and SCHMID Group 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 SCHMID Group NV are associated (or correlated) with Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of SCHMID Group i.e., SCHMID Group and Mosaic go up and down completely randomly.

Pair Corralation between SCHMID Group and Mosaic

Assuming the 90 days horizon SCHMID Group NV is expected to under-perform the Mosaic. In addition to that, SCHMID Group is 4.97 times more volatile than The Mosaic. It trades about -0.11 of its total potential returns per unit of risk. The Mosaic is currently generating about -0.22 per unit of volatility. If you would invest  2,677  in The Mosaic on October 12, 2024 and sell it today you would lose (209.00) from holding The Mosaic or give up 7.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

SCHMID Group NV  vs.  The Mosaic

SCHMID Group NV

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCHMID Group NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, SCHMID Group showed solid returns over the last few months and may actually be approaching a breakup point.

Mosaic

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with SCHMID Group and Mosaic

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

The idea behind SCHMID Group NV and The Mosaic 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.