Correlation Between MS Autotech and Interflex
Can any of the company-specific risk be diversified away by investing in both MS Autotech and Interflex 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 Interflex 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 Interflex Co, you can compare the effects of market volatilities on MS Autotech and Interflex 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 Interflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and Interflex.
Diversification Opportunities for MS Autotech and Interflex
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 123040 and Interflex is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and Interflex Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interflex 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 Interflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interflex has no effect on the direction of MS Autotech i.e., MS Autotech and Interflex go up and down completely randomly.
Pair Corralation between MS Autotech and Interflex
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to under-perform the Interflex. In addition to that, MS Autotech is 1.39 times more volatile than Interflex Co. It trades about -0.21 of its total potential returns per unit of risk. Interflex Co is currently generating about -0.18 per unit of volatility. If you would invest 1,000,000 in Interflex Co on August 29, 2024 and sell it today you would lose (83,000) from holding Interflex Co or give up 8.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MS Autotech CoLtd vs. Interflex Co
Performance |
| Timeline |
| MS Autotech CoLtd |
| Interflex |
MS Autotech and Interflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MS Autotech and Interflex
The main advantage of trading using opposite MS Autotech and Interflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech position performs unexpectedly, Interflex 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 Interflex will offset losses from the drop in Interflex's long position.| MS Autotech vs. KMH Hitech Co | MS Autotech vs. GemVaxKAEL CoLtd | MS Autotech vs. Busan Industrial Co | MS Autotech vs. Busan Ind |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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