Correlation Between Bicicletas Monark and Dhler SA

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

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

Diversification Opportunities for Bicicletas Monark and Dhler SA

-0.63

Correlation Coefficient

Bicicletas Monark  Dhler SA

Excellent diversification

The 3 months correlation between Bicicletas and Dhler is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bicicletas Monark SA and Dhler SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dhler SA and Bicicletas Monark 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 Bicicletas Monark SA are associated (or correlated) with Dhler SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dhler SA has no effect on the direction of Bicicletas Monark i.e., Bicicletas Monark and Dhler SA go up and down completely randomly.

Pair Corralation between Bicicletas Monark and Dhler SA

Assuming the 90 days trading horizon Bicicletas Monark SA is expected to under-perform the Dhler SA. In addition to that, Bicicletas Monark is 2.03 times more volatile than Dhler SA. It trades about -0.11 of its total potential returns per unit of risk. Dhler SA is currently generating about -0.01 per unit of volatility. If you would invest  448.00  in Dhler SA on February 17, 2024 and sell it today you would lose (6.00) from holding Dhler SA or give up 1.34% of portfolio value over 90 days.

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

Bicicletas Monark SA  vs.  Dhler SA

Bicicletas Monark

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bicicletas Monark SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Bicicletas Monark may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Dhler SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dhler SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Preferred Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Bicicletas Monark and Dhler SA

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

The idea behind Bicicletas Monark SA and Dhler 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 CEOs Directory module to screen CEOs from public companies around the world.