Correlation Between Moulinvest and Kumulus Vape

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

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

Diversification Opportunities for Moulinvest and Kumulus Vape

0.85

Correlation Coefficient

Moulinvest  Kumulus Vape

Very poor diversification

The 3 months correlation between Moulinvest and Kumulus is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Moulinvest and Kumulus Vape SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumulus Vape SA and Moulinvest 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 Moulinvest are associated (or correlated) with Kumulus Vape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumulus Vape SA has no effect on the direction of Moulinvest i.e., Moulinvest and Kumulus Vape go up and down completely randomly.

Pair Corralation between Moulinvest and Kumulus Vape

Assuming the 90 days trading horizon Moulinvest is expected to generate 0.71 times more return on investment than Kumulus Vape. However, Moulinvest is 1.4 times less risky than Kumulus Vape. It trades about -0.08 of its potential returns per unit of risk. Kumulus Vape SA is currently generating about -0.12 per unit of risk. If you would invest  1,405  in Moulinvest on September 12, 2024 and sell it today you would lose (155.00) from holding Moulinvest or give up 11.03% of portfolio value over 90 days.

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

Moulinvest  vs.  Kumulus Vape SA

Moulinvest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moulinvest has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Kumulus Vape SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kumulus Vape SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Moulinvest and Kumulus Vape

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

The idea behind Moulinvest and Kumulus Vape 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.