Correlation Between Nova Wellness and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Nova Wellness 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 Nova Wellness and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nova Wellness Group and Magni Tech Industries, you can compare the effects of market volatilities on Nova Wellness 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 Nova Wellness with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nova Wellness and Magni Tech.
Diversification Opportunities for Nova Wellness and Magni Tech
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nova and Magni is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nova Wellness Group 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 Nova Wellness 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 Nova Wellness Group 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 Nova Wellness i.e., Nova Wellness and Magni Tech go up and down completely randomly.
Pair Corralation between Nova Wellness and Magni Tech
Assuming the 90 days trading horizon Nova Wellness Group is expected to under-perform the Magni Tech. In addition to that, Nova Wellness is 1.07 times more volatile than Magni Tech Industries. It trades about -0.05 of its total potential returns per unit of risk. Magni Tech Industries is currently generating about 0.1 per unit of volatility. If you would invest 214.00 in Magni Tech Industries on August 28, 2024 and sell it today you would earn a total of 52.00 from holding Magni Tech Industries or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nova Wellness Group vs. Magni Tech Industries
Performance |
| Timeline |
| Nova Wellness Group |
| Magni Tech Industries |
Nova Wellness and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nova Wellness and Magni Tech
The main advantage of trading using opposite Nova Wellness and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Wellness 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.| Nova Wellness vs. Daya Materials Bhd | Nova Wellness vs. Senheng New Retail | Nova Wellness vs. Tex Cycle Technology | Nova Wellness vs. BP Plastics Holding |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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