Correlation Between Makalot Industrial and President Chain
Can any of the company-specific risk be diversified away by investing in both Makalot Industrial and President Chain 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 Makalot Industrial and President Chain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Makalot Industrial Co and President Chain Store, you can compare the effects of market volatilities on Makalot Industrial and President Chain 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 Makalot Industrial with a short position of President Chain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makalot Industrial and President Chain.
Diversification Opportunities for Makalot Industrial and President Chain
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Makalot and President is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Makalot Industrial Co and President Chain Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on President Chain Store and Makalot Industrial 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 Makalot Industrial Co are associated (or correlated) with President Chain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of President Chain Store has no effect on the direction of Makalot Industrial i.e., Makalot Industrial and President Chain go up and down completely randomly.
Pair Corralation between Makalot Industrial and President Chain
Assuming the 90 days trading horizon Makalot Industrial Co is expected to generate 2.32 times more return on investment than President Chain. However, Makalot Industrial is 2.32 times more volatile than President Chain Store. It trades about 0.37 of its potential returns per unit of risk. President Chain Store is currently generating about -0.23 per unit of risk. If you would invest 31,550 in Makalot Industrial Co on October 23, 2024 and sell it today you would earn a total of 3,150 from holding Makalot Industrial Co or generate 9.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Makalot Industrial Co vs. President Chain Store
Performance |
| Timeline |
| Makalot Industrial |
| President Chain Store |
Makalot Industrial and President Chain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Makalot Industrial and President Chain
The main advantage of trading using opposite Makalot Industrial and President Chain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makalot Industrial position performs unexpectedly, President Chain 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 President Chain will offset losses from the drop in President Chain's long position.| Makalot Industrial vs. Chaintech Technology Corp | Makalot Industrial vs. AVerMedia Technologies | Makalot Industrial vs. Avision | Makalot Industrial vs. Clevo Co |
| President Chain vs. Uni President Enterprises Corp | President Chain vs. Formosa Plastics Corp | President Chain vs. Chunghwa Telecom Co | President Chain vs. Fubon Financial Holding |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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