Correlation Between Strategic Investments and MEBUKI FINANCIAL

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

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

Diversification Opportunities for Strategic Investments and MEBUKI FINANCIAL

-0.57

Correlation Coefficient

Strategic Investments  MEBUKI FINANCIAL

Excellent diversification

The 3 months correlation between Strategic and MEBUKI is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and MEBUKI FINANCIAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEBUKI FINANCIAL and Strategic Investments 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 Strategic Investments AS 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 Strategic Investments i.e., Strategic Investments and MEBUKI FINANCIAL go up and down completely randomly.

Pair Corralation between Strategic Investments and MEBUKI FINANCIAL

Assuming the 90 days horizon Strategic Investments AS is expected to under-perform the MEBUKI FINANCIAL. In addition to that, Strategic Investments is 1.77 times more volatile than MEBUKI FINANCIAL GROUP. It trades about -0.31 of its total potential returns per unit of risk. MEBUKI FINANCIAL GROUP is currently generating about 0.1 per unit of volatility. If you would invest  390.00  in MEBUKI FINANCIAL GROUP on September 20, 2024 and sell it today you would earn a total of  10.00  from holding MEBUKI FINANCIAL GROUP or generate 2.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Strategic Investments AS  vs.  MEBUKI FINANCIAL GROUP

Strategic Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategic Investments AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Strategic Investments 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

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MEBUKI FINANCIAL GROUP are ranked lower than 9 (%) 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 Strategic Investments and MEBUKI FINANCIAL

The main advantage of trading using opposite Strategic Investments and MEBUKI FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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 Strategic Investments AS 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.