Correlation Between Patria Investments and MAHLE Metal

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

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

Diversification Opportunities for Patria Investments and MAHLE Metal

0.33

Correlation Coefficient

Patria Investments  MAHLE Metal

Weak diversification

The 3 months correlation between Patria and MAHLE is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Patria Investments Limited and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve and Patria Investments 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 Patria Investments Limited are associated (or correlated) with MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of Patria Investments i.e., Patria Investments and MAHLE Metal go up and down completely randomly.

Pair Corralation between Patria Investments and MAHLE Metal

Assuming the 90 days trading horizon Patria Investments Limited is expected to generate 0.88 times more return on investment than MAHLE Metal. However, Patria Investments Limited is 1.14 times less risky than MAHLE Metal. It trades about 0.33 of its potential returns per unit of risk. MAHLE Metal Leve is currently generating about 0.0 per unit of risk. If you would invest  2,930  in Patria Investments Limited on April 25, 2025 and sell it today you would earn a total of  906.00  from holding Patria Investments Limited or generate 30.92% return on investment over 90 days.

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

Patria Investments Limited  vs.  MAHLE Metal Leve

Patria Investments

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Patria Investments Limited are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Patria Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Patria Investments and MAHLE Metal

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

The idea behind Patria Investments Limited and MAHLE Metal Leve 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.