Correlation Between Mgame Corp and Ray Co
Can any of the company-specific risk be diversified away by investing in both Mgame Corp and Ray Co 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 Ray Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mgame Corp and Ray Co, you can compare the effects of market volatilities on Mgame Corp and Ray Co 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 Ray Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mgame Corp and Ray Co.
Diversification Opportunities for Mgame Corp and Ray Co
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mgame and Ray is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mgame Corp and Ray Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ray Co 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 Ray Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ray Co has no effect on the direction of Mgame Corp i.e., Mgame Corp and Ray Co go up and down completely randomly.
Pair Corralation between Mgame Corp and Ray Co
Assuming the 90 days trading horizon Mgame Corp is expected to generate 1.27 times more return on investment than Ray Co. However, Mgame Corp is 1.27 times more volatile than Ray Co. It trades about -0.06 of its potential returns per unit of risk. Ray Co is currently generating about -0.26 per unit of risk. If you would invest 627,000 in Mgame Corp on September 12, 2024 and sell it today you would lose (65,000) from holding Mgame Corp or give up 10.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mgame Corp vs. Ray Co
Performance |
| Timeline |
| Mgame Corp |
| Ray Co |
Mgame Corp and Ray Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mgame Corp and Ray Co
The main advantage of trading using opposite Mgame Corp and Ray Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mgame Corp position performs unexpectedly, Ray Co 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 Ray Co will offset losses from the drop in Ray Co's long position.| Mgame Corp vs. Samsung Electronics Co | Mgame Corp vs. Samsung Electronics Co | Mgame Corp vs. SK Hynix | Mgame Corp vs. POSCO Holdings |
| Ray Co vs. KIWI Media Group | Ray Co vs. Hanjin Transportation Co | Ray Co vs. Mgame Corp | Ray Co vs. TJ media Co |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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