Correlation Between MS Autotech and GaeaSoft Corp
Can any of the company-specific risk be diversified away by investing in both MS Autotech and GaeaSoft 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 MS Autotech and GaeaSoft Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MS Autotech CoLtd and GaeaSoft Corp, you can compare the effects of market volatilities on MS Autotech and GaeaSoft 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 MS Autotech with a short position of GaeaSoft Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and GaeaSoft Corp.
Diversification Opportunities for MS Autotech and GaeaSoft Corp
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 123040 and GaeaSoft is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and GaeaSoft Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GaeaSoft Corp and MS Autotech 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 MS Autotech CoLtd are associated (or correlated) with GaeaSoft Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GaeaSoft Corp has no effect on the direction of MS Autotech i.e., MS Autotech and GaeaSoft Corp go up and down completely randomly.
Pair Corralation between MS Autotech and GaeaSoft Corp
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to generate 1.33 times more return on investment than GaeaSoft Corp. However, MS Autotech is 1.33 times more volatile than GaeaSoft Corp. It trades about -0.18 of its potential returns per unit of risk. GaeaSoft Corp is currently generating about -0.26 per unit of risk. If you would invest 346,500 in MS Autotech CoLtd on September 3, 2024 and sell it today you would lose (76,500) from holding MS Autotech CoLtd or give up 22.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MS Autotech CoLtd vs. GaeaSoft Corp
Performance |
| Timeline |
| MS Autotech CoLtd |
| GaeaSoft Corp |
MS Autotech and GaeaSoft Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MS Autotech and GaeaSoft Corp
The main advantage of trading using opposite MS Autotech and GaeaSoft Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech position performs unexpectedly, GaeaSoft 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 GaeaSoft Corp will offset losses from the drop in GaeaSoft Corp's long position.| MS Autotech vs. EV Advanced Material | MS Autotech vs. Top Material Co | MS Autotech vs. Shinsegae Food | MS Autotech vs. Foodnamoo |
| GaeaSoft Corp vs. Dongil Technology | GaeaSoft Corp vs. KG Eco Technology | GaeaSoft Corp vs. DB Financial Investment | GaeaSoft Corp vs. Puloon Technology |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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