Correlation Between PLAY2CHILL and MEBUKI FINANCIAL

Can any of the company-specific risk be diversified away by investing in both PLAY2CHILL and MEBUKI FINANCIAL 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 PLAY2CHILL and MEBUKI FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PLAY2CHILL SA ZY and MEBUKI FINANCIAL GROUP, you can compare the effects of market volatilities on PLAY2CHILL and MEBUKI FINANCIAL 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 PLAY2CHILL with a short position of MEBUKI FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAY2CHILL and MEBUKI FINANCIAL.

Diversification Opportunities for PLAY2CHILL and MEBUKI FINANCIAL

0.48

Correlation Coefficient

PLAY2CHILL  MEBUKI FINANCIAL

Very weak diversification

The 3 months correlation between PLAY2CHILL and MEBUKI is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding PLAY2CHILL SA ZY and MEBUKI FINANCIAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEBUKI FINANCIAL and PLAY2CHILL 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 PLAY2CHILL SA ZY are associated (or correlated) with MEBUKI FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEBUKI FINANCIAL has no effect on the direction of PLAY2CHILL i.e., PLAY2CHILL and MEBUKI FINANCIAL go up and down completely randomly.

Pair Corralation between PLAY2CHILL and MEBUKI FINANCIAL

Assuming the 90 days horizon PLAY2CHILL is expected to generate 3.42 times less return on investment than MEBUKI FINANCIAL. In addition to that, PLAY2CHILL is 1.41 times more volatile than MEBUKI FINANCIAL GROUP. It trades about 0.03 of its total potential returns per unit of risk. MEBUKI FINANCIAL GROUP is currently generating about 0.16 per unit of volatility. If you would invest  338.00  in MEBUKI FINANCIAL GROUP on September 17, 2024 and sell it today you would earn a total of  74.00  from holding MEBUKI FINANCIAL GROUP or generate 21.89% return on investment over 90 days.

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

PLAY2CHILL SA ZY  vs.  MEBUKI FINANCIAL GROUP

PLAY2CHILL SA ZY

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PLAY2CHILL SA ZY are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, PLAY2CHILL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MEBUKI FINANCIAL

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MEBUKI FINANCIAL GROUP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MEBUKI FINANCIAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLAY2CHILL and MEBUKI FINANCIAL

The main advantage of trading using opposite PLAY2CHILL and MEBUKI FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAY2CHILL position performs unexpectedly, MEBUKI FINANCIAL 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 MEBUKI FINANCIAL will offset losses from the drop in MEBUKI FINANCIAL's long position.

The idea behind PLAY2CHILL SA ZY and MEBUKI FINANCIAL GROUP 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.