Correlation Between MS Autotech and Global Standard
Can any of the company-specific risk be diversified away by investing in both MS Autotech and Global Standard 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 Global Standard 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 Global Standard Technology, you can compare the effects of market volatilities on MS Autotech and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and Global Standard.
Diversification Opportunities for MS Autotech and Global Standard
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 123040 and Global is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of MS Autotech i.e., MS Autotech and Global Standard go up and down completely randomly.
Pair Corralation between MS Autotech and Global Standard
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to under-perform the Global Standard. But the stock apears to be less risky and, when comparing its historical volatility, MS Autotech CoLtd is 1.21 times less risky than Global Standard. The stock trades about -0.22 of its potential returns per unit of risk. The Global Standard Technology is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,577,000 in Global Standard Technology on September 3, 2024 and sell it today you would lose (177,000) from holding Global Standard Technology or give up 11.22% 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. Global Standard Technology
Performance |
| Timeline |
| MS Autotech CoLtd |
| Global Standard Tech |
MS Autotech and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MS Autotech and Global Standard
The main advantage of trading using opposite MS Autotech and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| MS Autotech vs. EV Advanced Material | MS Autotech vs. Top Material Co | MS Autotech vs. Shinsegae Food | MS Autotech vs. Foodnamoo |
| Global Standard vs. Dongsin Engineering Construction | Global Standard vs. Doosan Fuel Cell | Global Standard vs. Daishin Balance 1 | Global Standard vs. Total Soft Bank |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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