Correlation Between Mlk Foods and Datawalk

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

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

Diversification Opportunities for Mlk Foods and Datawalk

-0.8

Correlation Coefficient

Mlk Foods  Datawalk

Pay attention - limited upside

The 3 months correlation between Mlk and Datawalk is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mlk Foods Public and Datawalk SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datawalk SA and Mlk Foods 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 Mlk Foods Public are associated (or correlated) with Datawalk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datawalk SA has no effect on the direction of Mlk Foods i.e., Mlk Foods and Datawalk go up and down completely randomly.

Pair Corralation between Mlk Foods and Datawalk

Assuming the 90 days trading horizon Mlk Foods is expected to generate 66.43 times less return on investment than Datawalk. In addition to that, Mlk Foods is 1.24 times more volatile than Datawalk SA. It trades about 0.0 of its total potential returns per unit of risk. Datawalk SA is currently generating about 0.16 per unit of volatility. If you would invest  8,320  in Datawalk SA on April 24, 2025 and sell it today you would earn a total of  3,280  from holding Datawalk SA or generate 39.42% return on investment over 90 days.

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

Mlk Foods Public  vs.  Datawalk SA

Mlk Foods Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mlk Foods Public has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Mlk Foods is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Datawalk SA

Risk-Adjusted Performance

Good

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

Pair Trading with Mlk Foods and Datawalk

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

The idea behind Mlk Foods Public and Datawalk 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.