Correlation Between System and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both System and Mgame Corp 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 System and Mgame Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between System and Application and Mgame Corp, you can compare the effects of market volatilities on System and Mgame Corp 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 System with a short position of Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of System and Mgame Corp.
Diversification Opportunities for System and Mgame Corp
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between System and Mgame is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding System and Application and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame Corp and System 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 System and Application are associated (or correlated) with Mgame Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mgame Corp has no effect on the direction of System i.e., System and Mgame Corp go up and down completely randomly.
Pair Corralation between System and Mgame Corp
Assuming the 90 days trading horizon System and Application is expected to generate 1.27 times more return on investment than Mgame Corp. However, System is 1.27 times more volatile than Mgame Corp. It trades about -0.01 of its potential returns per unit of risk. Mgame Corp is currently generating about -0.03 per unit of risk. If you would invest 219,824 in System and Application on October 16, 2024 and sell it today you would lose (58,424) from holding System and Application or give up 26.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.03% |
| Values | Daily Returns |
System and Application vs. Mgame Corp
Performance |
| Timeline |
| System and Application |
| Mgame Corp |
System and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with System and Mgame Corp
The main advantage of trading using opposite System and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if System position performs unexpectedly, Mgame Corp 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 Mgame Corp will offset losses from the drop in Mgame Corp's long position.| System vs. Daejung Chemicals Metals | System vs. Daishin Information Communications | System vs. Hyundai Industrial Co | System vs. Drb Industrial |
| Mgame Corp vs. System and Application | Mgame Corp vs. EBEST Investment Securities | Mgame Corp vs. Lotte Data Communication | Mgame Corp vs. Moadata 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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