Correlation Between EV Advanced and Mgame Corp
Can any of the company-specific risk be diversified away by investing in both EV Advanced and Mgame 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 EV Advanced and Mgame Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EV Advanced Material and Mgame Corp, you can compare the effects of market volatilities on EV Advanced and Mgame 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 EV Advanced with a short position of Mgame Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EV Advanced and Mgame Corp.
Diversification Opportunities for EV Advanced and Mgame Corp
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 131400 and Mgame is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding EV Advanced Material and Mgame Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mgame Corp and EV Advanced 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 EV Advanced Material are associated (or correlated) with Mgame Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mgame Corp has no effect on the direction of EV Advanced i.e., EV Advanced and Mgame Corp go up and down completely randomly.
Pair Corralation between EV Advanced and Mgame Corp
Assuming the 90 days trading horizon EV Advanced Material is expected to generate 2.47 times more return on investment than Mgame Corp. However, EV Advanced is 2.47 times more volatile than Mgame Corp. It trades about 0.04 of its potential returns per unit of risk. Mgame Corp is currently generating about -0.02 per unit of risk. If you would invest 156,364 in EV Advanced Material on October 13, 2024 and sell it today you would earn a total of 36,836 from holding EV Advanced Material or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.43% |
| Values | Daily Returns |
EV Advanced Material vs. Mgame Corp
Performance |
| Timeline |
| EV Advanced Material |
| Mgame Corp |
EV Advanced and Mgame Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EV Advanced and Mgame Corp
The main advantage of trading using opposite EV Advanced and Mgame Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EV Advanced position performs unexpectedly, Mgame 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 Mgame Corp will offset losses from the drop in Mgame Corp's long position.| EV Advanced vs. SK Chemicals Co | EV Advanced vs. Ssangyong Information Communication | EV Advanced vs. DataSolution | EV Advanced vs. Inzi Display CoLtd |
| Mgame Corp vs. EV Advanced Material | Mgame Corp vs. Finebesteel | Mgame Corp vs. Hyundai Engineering Plastics | Mgame Corp vs. LAKE MATERIALS LTD |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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