Correlation Between ES Ceramics and MI Technovation
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and MI Technovation 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 ES Ceramics and MI Technovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ES Ceramics Technology and MI Technovation Bhd, you can compare the effects of market volatilities on ES Ceramics and MI Technovation 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 ES Ceramics with a short position of MI Technovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and MI Technovation.
Diversification Opportunities for ES Ceramics and MI Technovation
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0100 and 5286 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and MI Technovation Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MI Technovation Bhd and ES Ceramics 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 ES Ceramics Technology are associated (or correlated) with MI Technovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MI Technovation Bhd has no effect on the direction of ES Ceramics i.e., ES Ceramics and MI Technovation go up and down completely randomly.
Pair Corralation between ES Ceramics and MI Technovation
Assuming the 90 days trading horizon ES Ceramics Technology is expected to under-perform the MI Technovation. In addition to that, ES Ceramics is 2.17 times more volatile than MI Technovation Bhd. It trades about -0.14 of its total potential returns per unit of risk. MI Technovation Bhd is currently generating about -0.28 per unit of volatility. If you would invest 219.00 in MI Technovation Bhd on November 28, 2024 and sell it today you would lose (26.00) from holding MI Technovation Bhd or give up 11.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. MI Technovation Bhd
Performance |
| Timeline |
| ES Ceramics Technology |
| MI Technovation Bhd |
ES Ceramics and MI Technovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and MI Technovation
The main advantage of trading using opposite ES Ceramics and MI Technovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, MI Technovation 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 MI Technovation will offset losses from the drop in MI Technovation's long position.| ES Ceramics vs. Press Metal Bhd | ES Ceramics vs. Carlsberg Brewery Malaysia | ES Ceramics vs. Kossan Rubber Industries | ES Ceramics vs. Ho Hup Construction |
| MI Technovation vs. Press Metal Bhd | MI Technovation vs. Choo Bee Metal | MI Technovation vs. Datasonic Group Bhd | MI Technovation vs. Leader Steel Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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