Correlation Between Digistar Bhd and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Digistar Bhd and Magni Tech 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 Digistar Bhd and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digistar Bhd and Magni Tech Industries, you can compare the effects of market volatilities on Digistar Bhd and Magni Tech 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 Digistar Bhd with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digistar Bhd and Magni Tech.
Diversification Opportunities for Digistar Bhd and Magni Tech
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Digistar and Magni is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Digistar Bhd and Magni Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magni Tech Industries and Digistar Bhd 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 Digistar Bhd are associated (or correlated) with Magni Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magni Tech Industries has no effect on the direction of Digistar Bhd i.e., Digistar Bhd and Magni Tech go up and down completely randomly.
Pair Corralation between Digistar Bhd and Magni Tech
Assuming the 90 days trading horizon Digistar Bhd is expected to generate 3.7 times less return on investment than Magni Tech. In addition to that, Digistar Bhd is 4.01 times more volatile than Magni Tech Industries. It trades about 0.01 of its total potential returns per unit of risk. Magni Tech Industries is currently generating about 0.07 per unit of volatility. If you would invest 163.00 in Magni Tech Industries on August 27, 2024 and sell it today you would earn a total of 94.00 from holding Magni Tech Industries or generate 57.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digistar Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| Digistar Bhd |
| Magni Tech Industries |
Digistar Bhd and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digistar Bhd and Magni Tech
The main advantage of trading using opposite Digistar Bhd and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digistar Bhd position performs unexpectedly, Magni Tech 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 Magni Tech will offset losses from the drop in Magni Tech's long position.| Digistar Bhd vs. Petronas Chemicals Group | Digistar Bhd vs. Duopharma Biotech Bhd | Digistar Bhd vs. Magni Tech Industries | Digistar Bhd vs. Apollo Food Holdings |
| Magni Tech vs. Coraza Integrated Technology | Magni Tech vs. Greatech Technology Bhd | Magni Tech vs. Cosmos Technology International | Magni Tech vs. British American Tobacco |
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 Stocks Directory module to find actively traded stocks across global markets.
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