Correlation Between OpenSys M and Magni Tech
Can any of the company-specific risk be diversified away by investing in both OpenSys M 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 OpenSys M and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OpenSys M Bhd and Magni Tech Industries, you can compare the effects of market volatilities on OpenSys M 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 OpenSys M with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of OpenSys M and Magni Tech.
Diversification Opportunities for OpenSys M and Magni Tech
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between OpenSys and Magni is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding OpenSys M 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 OpenSys M 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 OpenSys M 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 OpenSys M i.e., OpenSys M and Magni Tech go up and down completely randomly.
Pair Corralation between OpenSys M and Magni Tech
Assuming the 90 days trading horizon OpenSys M Bhd is expected to under-perform the Magni Tech. In addition to that, OpenSys M is 1.62 times more volatile than Magni Tech Industries. It trades about -0.07 of its total potential returns per unit of risk. Magni Tech Industries is currently generating about 0.5 per unit of volatility. If you would invest 243.00 in Magni Tech Industries on August 30, 2024 and sell it today you would earn a total of 27.00 from holding Magni Tech Industries or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OpenSys M Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| OpenSys M Bhd |
| Magni Tech Industries |
OpenSys M and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OpenSys M and Magni Tech
The main advantage of trading using opposite OpenSys M and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OpenSys M 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.| OpenSys M vs. Malayan Banking Bhd | OpenSys M vs. Public Bank Bhd | OpenSys M vs. Petronas Chemicals Group | OpenSys M vs. IHH Healthcare Bhd |
| Magni Tech vs. Minetech Resources Bhd | Magni Tech vs. Sunzen Biotech Bhd | Magni Tech vs. Hengyuan Refining | Magni Tech vs. Impiana Hotels Bhd |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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