Correlation Between Manitou BF and ISPD Network

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

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

Diversification Opportunities for Manitou BF and ISPD Network

0.21

Correlation Coefficient

Manitou BF  ISPD Network

Modest diversification

The 3 months correlation between Manitou and ISPD is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and ISPD Network SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISPD Network SA and Manitou BF 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 Manitou BF SA are associated (or correlated) with ISPD Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISPD Network SA has no effect on the direction of Manitou BF i.e., Manitou BF and ISPD Network go up and down completely randomly.

Pair Corralation between Manitou BF and ISPD Network

Assuming the 90 days trading horizon Manitou BF SA is expected to generate 0.87 times more return on investment than ISPD Network. However, Manitou BF SA is 1.15 times less risky than ISPD Network. It trades about 0.03 of its potential returns per unit of risk. ISPD Network SA is currently generating about -0.08 per unit of risk. If you would invest  1,686  in Manitou BF SA on September 14, 2024 and sell it today you would earn a total of  48.00  from holding Manitou BF SA or generate 2.85% return on investment over 90 days.

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

Manitou BF SA  vs.  ISPD Network SA

Manitou BF SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Manitou BF SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Manitou BF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ISPD Network SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ISPD Network SA 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.

Pair Trading with Manitou BF and ISPD Network

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

The idea behind Manitou BF SA and ISPD Network 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.