Correlation Between Mundial SA and WEG SA
Can any of the company-specific risk be diversified away by investing in both Mundial SA and WEG 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 Mundial SA and WEG SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mundial SA and WEG SA, you can compare the effects of market volatilities on Mundial SA and WEG 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 Mundial SA with a short position of WEG SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mundial SA and WEG SA.
Diversification Opportunities for Mundial SA and WEG SA
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mundial and WEG is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mundial SA and WEG SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEG SA and Mundial SA 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 Mundial SA are associated (or correlated) with WEG SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEG SA has no effect on the direction of Mundial SA i.e., Mundial SA and WEG SA go up and down completely randomly.
Pair Corralation between Mundial SA and WEG SA
Assuming the 90 days trading horizon Mundial SA is expected to under-perform the WEG SA. In addition to that, Mundial SA is 2.89 times more volatile than WEG SA. It trades about -0.11 of its total potential returns per unit of risk. WEG SA is currently generating about 0.07 per unit of volatility. If you would invest 3,820 in WEG SA on February 6, 2024 and sell it today you would earn a total of 57.00 from holding WEG SA or generate 1.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mundial SA vs. WEG SA
Performance |
Timeline |
Mundial SA |
WEG SA |
Mundial SA and WEG SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mundial SA and WEG SA
The main advantage of trading using opposite Mundial SA and WEG SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mundial SA position performs unexpectedly, WEG 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 WEG SA will offset losses from the drop in WEG SA's long position.Mundial SA vs. Refinaria de Petrleos | Mundial SA vs. Hrcules SA | Mundial SA vs. Minupar Participaes SA | Mundial SA vs. Rossi Residencial SA |
Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |