Correlation Between Spolytech and Microfriend
Can any of the company-specific risk be diversified away by investing in both Spolytech and Microfriend 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 Spolytech and Microfriend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spolytech Co and Microfriend, you can compare the effects of market volatilities on Spolytech and Microfriend 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 Spolytech with a short position of Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spolytech and Microfriend.
Diversification Opportunities for Spolytech and Microfriend
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Spolytech and Microfriend is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Spolytech Co and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend and Spolytech 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 Spolytech Co are associated (or correlated) with Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of Spolytech i.e., Spolytech and Microfriend go up and down completely randomly.
Pair Corralation between Spolytech and Microfriend
Assuming the 90 days trading horizon Spolytech Co is expected to generate 1.46 times more return on investment than Microfriend. However, Spolytech is 1.46 times more volatile than Microfriend. It trades about 0.24 of its potential returns per unit of risk. Microfriend is currently generating about -0.46 per unit of risk. If you would invest 133,800 in Spolytech Co on November 7, 2024 and sell it today you would earn a total of 17,500 from holding Spolytech Co or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Spolytech Co vs. Microfriend
Performance |
| Timeline |
| Spolytech |
| Microfriend |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Spolytech and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spolytech and Microfriend
The main advantage of trading using opposite Spolytech and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spolytech position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| Spolytech vs. Mobile Appliance | Spolytech vs. T3 Entertainment Co | Spolytech vs. Pan Entertainment Co | Spolytech vs. Dgb Financial |
| Microfriend vs. LAKE MATERIALS LTD | Microfriend vs. Ewon Comfortech Co | Microfriend vs. SK Chemicals Co | Microfriend vs. Barunson Entertainment Arts |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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