Correlation Between MS Autotech and PanGen Biotech
Can any of the company-specific risk be diversified away by investing in both MS Autotech and PanGen Biotech 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 PanGen Biotech 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 PanGen Biotech, you can compare the effects of market volatilities on MS Autotech and PanGen Biotech 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 PanGen Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and PanGen Biotech.
Diversification Opportunities for MS Autotech and PanGen Biotech
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 123040 and PanGen is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and PanGen Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PanGen Biotech 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 PanGen Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PanGen Biotech has no effect on the direction of MS Autotech i.e., MS Autotech and PanGen Biotech go up and down completely randomly.
Pair Corralation between MS Autotech and PanGen Biotech
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to under-perform the PanGen Biotech. But the stock apears to be less risky and, when comparing its historical volatility, MS Autotech CoLtd is 1.96 times less risky than PanGen Biotech. The stock trades about -0.18 of its potential returns per unit of risk. The PanGen Biotech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 587,000 in PanGen Biotech on September 1, 2024 and sell it today you would lose (15,000) from holding PanGen Biotech or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MS Autotech CoLtd vs. PanGen Biotech
Performance |
| Timeline |
| MS Autotech CoLtd |
| PanGen Biotech |
MS Autotech and PanGen Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MS Autotech and PanGen Biotech
The main advantage of trading using opposite MS Autotech and PanGen Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech position performs unexpectedly, PanGen Biotech 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 PanGen Biotech will offset losses from the drop in PanGen Biotech's long position.| MS Autotech vs. LG Display | MS Autotech vs. Hyundai Motor Co | MS Autotech vs. Hyundai Motor Co | MS Autotech vs. Adaptive Plasma Technology |
| PanGen Biotech vs. SK Bioscience Co | PanGen Biotech vs. MedPacto | PanGen Biotech vs. Prestige Biologics 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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