Correlation Between MAHLE Metal and Capital One

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

By analyzing existing cross correlation between MAHLE Metal Leve and Capital One Financial, you can compare the effects of market volatilities on MAHLE Metal and Capital One 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 MAHLE Metal with a short position of Capital One. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Capital One.

Diversification Opportunities for MAHLE Metal and Capital One

0.13

Correlation Coefficient

MAHLE Metal  Capital One

Average diversification

The 3 months correlation between MAHLE and Capital is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Capital One Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital One Financial and MAHLE Metal 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 MAHLE Metal Leve are associated (or correlated) with Capital One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital One Financial has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and Capital One go up and down completely randomly.

Pair Corralation between MAHLE Metal and Capital One

Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the Capital One. In addition to that, MAHLE Metal is 1.2 times more volatile than Capital One Financial. It trades about -0.02 of its total potential returns per unit of risk. Capital One Financial is currently generating about 0.27 per unit of volatility. If you would invest  50,497  in Capital One Financial on April 24, 2025 and sell it today you would earn a total of  11,418  from holding Capital One Financial or generate 22.61% return on investment over 90 days.

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

MAHLE Metal Leve  vs.  Capital One Financial

MAHLE Metal Leve

Risk-Adjusted Performance

Very Weak

Over the last 90 days MAHLE Metal Leve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, MAHLE Metal is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Capital One Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Capital One Financial are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Capital One sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MAHLE Metal and Capital One

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

The idea behind MAHLE Metal Leve and Capital One Financial 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.