Correlation Between ES Ceramics and MyTech Group
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and MyTech Group 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 MyTech Group 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 MyTech Group Bhd, you can compare the effects of market volatilities on ES Ceramics and MyTech Group 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 MyTech Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and MyTech Group.
Diversification Opportunities for ES Ceramics and MyTech Group
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 0100 and MyTech is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and MyTech Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MyTech Group 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 MyTech Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MyTech Group Bhd has no effect on the direction of ES Ceramics i.e., ES Ceramics and MyTech Group go up and down completely randomly.
Pair Corralation between ES Ceramics and MyTech Group
Assuming the 90 days trading horizon ES Ceramics Technology is expected to generate 3.04 times more return on investment than MyTech Group. However, ES Ceramics is 3.04 times more volatile than MyTech Group Bhd. It trades about -0.08 of its potential returns per unit of risk. MyTech Group Bhd is currently generating about -0.3 per unit of risk. If you would invest 15.00 in ES Ceramics Technology on August 31, 2024 and sell it today you would lose (1.00) from holding ES Ceramics Technology or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. MyTech Group Bhd
Performance |
| Timeline |
| ES Ceramics Technology |
| MyTech Group Bhd |
ES Ceramics and MyTech Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and MyTech Group
The main advantage of trading using opposite ES Ceramics and MyTech Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, MyTech Group 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 MyTech Group will offset losses from the drop in MyTech Group's long position.| ES Ceramics vs. Binasat Communications Bhd | ES Ceramics vs. Nova Wellness Group | ES Ceramics vs. KPJ Healthcare Bhd | ES Ceramics vs. Resintech Bhd |
| MyTech Group vs. Greatech Technology Bhd | MyTech Group vs. Genetec Technology Bhd | MyTech Group vs. PIE Industrial Bhd | MyTech Group vs. Supercomnet Technologies 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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