Correlation Between MS Autotech and EV Advanced
Can any of the company-specific risk be diversified away by investing in both MS Autotech and EV Advanced 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 EV Advanced 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 EV Advanced Material, you can compare the effects of market volatilities on MS Autotech and EV Advanced 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 EV Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and EV Advanced.
Diversification Opportunities for MS Autotech and EV Advanced
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 123040 and 131400 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and EV Advanced Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EV Advanced Material 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 EV Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EV Advanced Material has no effect on the direction of MS Autotech i.e., MS Autotech and EV Advanced go up and down completely randomly.
Pair Corralation between MS Autotech and EV Advanced
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to generate 1.54 times more return on investment than EV Advanced. However, MS Autotech is 1.54 times more volatile than EV Advanced Material. It trades about 0.24 of its potential returns per unit of risk. EV Advanced Material is currently generating about 0.32 per unit of risk. If you would invest 248,000 in MS Autotech CoLtd on November 27, 2024 and sell it today you would earn a total of 41,000 from holding MS Autotech CoLtd or generate 16.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MS Autotech CoLtd vs. EV Advanced Material
Performance |
| Timeline |
| MS Autotech CoLtd |
| EV Advanced Material |
MS Autotech and EV Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MS Autotech and EV Advanced
The main advantage of trading using opposite MS Autotech and EV Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech position performs unexpectedly, EV Advanced 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 EV Advanced will offset losses from the drop in EV Advanced's long position.| MS Autotech vs. Samsung Electronics Co | MS Autotech vs. Samsung Electronics Co | MS Autotech vs. Naver | MS Autotech vs. SK Hynix |
| EV Advanced vs. Daejung Chemicals Metals | EV Advanced vs. ITM Semiconductor Co | EV Advanced vs. Hyundai Industrial Co | EV Advanced vs. Cheryong Industrial CoLtd |
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 CEOs Directory module to screen CEOs from public companies around the world.
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