Correlation Between Privasia Technology and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Privasia Technology 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 Privasia Technology and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Privasia Technology Bhd and Magni Tech Industries, you can compare the effects of market volatilities on Privasia Technology 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 Privasia Technology with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Privasia Technology and Magni Tech.
Diversification Opportunities for Privasia Technology and Magni Tech
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Privasia and Magni is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Privasia Technology 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 Privasia Technology 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 Privasia Technology 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 Privasia Technology i.e., Privasia Technology and Magni Tech go up and down completely randomly.
Pair Corralation between Privasia Technology and Magni Tech
Assuming the 90 days trading horizon Privasia Technology is expected to generate 1.09 times less return on investment than Magni Tech. In addition to that, Privasia Technology is 3.2 times more volatile than Magni Tech Industries. It trades about 0.02 of its total potential returns per unit of risk. Magni Tech Industries is currently generating about 0.08 per unit of volatility. If you would invest 170.00 in Magni Tech Industries on August 27, 2024 and sell it today you would earn a total of 87.00 from holding Magni Tech Industries or generate 51.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Privasia Technology Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| Privasia Technology Bhd |
| Magni Tech Industries |
Privasia Technology and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Privasia Technology and Magni Tech
The main advantage of trading using opposite Privasia Technology and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Privasia Technology 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.| Privasia Technology vs. Magni Tech Industries | Privasia Technology vs. Binasat Communications Bhd | Privasia Technology vs. RHB Bank Bhd | Privasia Technology vs. BP Plastics Holding |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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