Correlation Between Manitou BF and OPmobility

Can any of the company-specific risk be diversified away by investing in both Manitou BF and OPmobility 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 OPmobility 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 OPmobility SE, you can compare the effects of market volatilities on Manitou BF and OPmobility 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 OPmobility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and OPmobility.

Diversification Opportunities for Manitou BF and OPmobility

0.15

Correlation Coefficient

Manitou BF  OPmobility

Average diversification

The 3 months correlation between Manitou and OPmobility is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and OPmobility SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPmobility SE 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 OPmobility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPmobility SE has no effect on the direction of Manitou BF i.e., Manitou BF and OPmobility go up and down completely randomly.

Pair Corralation between Manitou BF and OPmobility

Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the OPmobility. But the stock apears to be less risky and, when comparing its historical volatility, Manitou BF SA is 1.22 times less risky than OPmobility. The stock trades about -0.02 of its potential returns per unit of risk. The OPmobility SE is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,389  in OPmobility SE on September 26, 2024 and sell it today you would lose (410.00) from holding OPmobility SE or give up 29.52% of portfolio value over 90 days.

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

Manitou BF SA  vs.  OPmobility SE

Manitou BF SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manitou BF SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

OPmobility SE

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OPmobility SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, OPmobility sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manitou BF and OPmobility

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

The idea behind Manitou BF SA and OPmobility SE 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.