Correlation Between Expat Serbia and Expat Macedonia

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

By analyzing existing cross correlation between Expat Serbia Belex15 and Expat Macedonia Mbi10, you can compare the effects of market volatilities on Expat Serbia and Expat Macedonia 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 Expat Serbia with a short position of Expat Macedonia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expat Serbia and Expat Macedonia.

Diversification Opportunities for Expat Serbia and Expat Macedonia

-0.37

Correlation Coefficient

Expat Serbia  Expat Macedonia

Very good diversification

The 3 months correlation between Expat and Expat is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Expat Serbia Belex15 and Expat Macedonia Mbi10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expat Macedonia Mbi10 and Expat Serbia 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 Expat Serbia Belex15 are associated (or correlated) with Expat Macedonia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expat Macedonia Mbi10 has no effect on the direction of Expat Serbia i.e., Expat Serbia and Expat Macedonia go up and down completely randomly.

Pair Corralation between Expat Serbia and Expat Macedonia

Assuming the 90 days trading horizon Expat Serbia is expected to generate 6.79 times less return on investment than Expat Macedonia. In addition to that, Expat Serbia is 3.47 times more volatile than Expat Macedonia Mbi10. It trades about 0.01 of its total potential returns per unit of risk. Expat Macedonia Mbi10 is currently generating about 0.17 per unit of volatility. If you would invest  222.00  in Expat Macedonia Mbi10 on September 4, 2024 and sell it today you would earn a total of  11.00  from holding Expat Macedonia Mbi10 or generate 4.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Expat Serbia Belex15  vs.  Expat Macedonia Mbi10

Expat Serbia Belex15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expat Serbia Belex15 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Expat Serbia is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Expat Macedonia Mbi10

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Expat Macedonia Mbi10 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Expat Macedonia is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Expat Serbia and Expat Macedonia

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

The idea behind Expat Serbia Belex15 and Expat Macedonia Mbi10 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.