Correlation Between Mgame Corp and Orbitech
Can any of the company-specific risk be diversified away by investing in both Mgame Corp and Orbitech 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 Mgame Corp and Orbitech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mgame Corp and Orbitech Co, you can compare the effects of market volatilities on Mgame Corp and Orbitech 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 Mgame Corp with a short position of Orbitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mgame Corp and Orbitech.
Diversification Opportunities for Mgame Corp and Orbitech
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mgame and Orbitech is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mgame Corp and Orbitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbitech and Mgame Corp 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 Mgame Corp are associated (or correlated) with Orbitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbitech has no effect on the direction of Mgame Corp i.e., Mgame Corp and Orbitech go up and down completely randomly.
Pair Corralation between Mgame Corp and Orbitech
Assuming the 90 days trading horizon Mgame Corp is expected to generate 0.8 times more return on investment than Orbitech. However, Mgame Corp is 1.25 times less risky than Orbitech. It trades about -0.02 of its potential returns per unit of risk. Orbitech Co is currently generating about -0.04 per unit of risk. If you would invest 759,488 in Mgame Corp on October 11, 2024 and sell it today you would lose (235,488) from holding Mgame Corp or give up 31.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.82% |
| Values | Daily Returns |
Mgame Corp vs. Orbitech Co
Performance |
| Timeline |
| Mgame Corp |
| Orbitech |
Mgame Corp and Orbitech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mgame Corp and Orbitech
The main advantage of trading using opposite Mgame Corp and Orbitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mgame Corp position performs unexpectedly, Orbitech 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 Orbitech will offset losses from the drop in Orbitech's long position.| Mgame Corp vs. Youngsin Metal Industrial | Mgame Corp vs. Daejung Chemicals Metals | Mgame Corp vs. Kukil Metal Co | Mgame Corp vs. CJ Seafood Corp |
| Orbitech vs. INNOX Advanced Materials | Orbitech vs. Mgame Corp | Orbitech vs. EBEST Investment Securities | Orbitech vs. Nh Investment And |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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