Correlation Between Mesabi Trust and Engie SA

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

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

Diversification Opportunities for Mesabi Trust and Engie SA

-0.12

Correlation Coefficient

Mesabi Trust  Engie SA

Good diversification

The 3 months correlation between Mesabi and Engie is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Mesabi Trust and Engie SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engie SA ADR and Mesabi Trust 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 Mesabi Trust are associated (or correlated) with Engie SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engie SA ADR has no effect on the direction of Mesabi Trust i.e., Mesabi Trust and Engie SA go up and down completely randomly.

Pair Corralation between Mesabi Trust and Engie SA

Considering the 90-day investment horizon Mesabi Trust is expected to generate 2.33 times more return on investment than Engie SA. However, Mesabi Trust is 2.33 times more volatile than Engie SA ADR. It trades about 0.04 of its potential returns per unit of risk. Engie SA ADR is currently generating about 0.09 per unit of risk. If you would invest  2,778  in Mesabi Trust on May 6, 2025 and sell it today you would earn a total of  151.00  from holding Mesabi Trust or generate 5.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Mesabi Trust  vs.  Engie SA ADR

Mesabi Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mesabi Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mesabi Trust may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Engie SA ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Engie SA ADR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward indicators, Engie SA may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mesabi Trust and Engie SA

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

The idea behind Mesabi Trust and Engie SA ADR 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.