Correlation Between CA Modas and Mliuz SA

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

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

Diversification Opportunities for CA Modas and Mliuz SA

0.49

Correlation Coefficient

CA Modas  Mliuz SA

Very weak diversification

The 3 months correlation between CEAB3 and Mliuz is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CA Modas SA and Mliuz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mliuz SA and CA Modas 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 CA Modas SA are associated (or correlated) with Mliuz SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mliuz SA has no effect on the direction of CA Modas i.e., CA Modas and Mliuz SA go up and down completely randomly.

Pair Corralation between CA Modas and Mliuz SA

Assuming the 90 days trading horizon CA Modas SA is expected to generate 0.46 times more return on investment than Mliuz SA. However, CA Modas SA is 2.17 times less risky than Mliuz SA. It trades about 0.15 of its potential returns per unit of risk. Mliuz SA is currently generating about 0.06 per unit of risk. If you would invest  1,259  in CA Modas SA on April 23, 2025 and sell it today you would earn a total of  400.00  from holding CA Modas SA or generate 31.77% return on investment over 90 days.

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

CA Modas SA  vs.  Mliuz SA

CA Modas SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CA Modas SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, CA Modas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mliuz SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mliuz SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mliuz SA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CA Modas and Mliuz SA

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

The idea behind CA Modas SA and Mliuz 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.