Correlation Between Makalot Industrial and Nan Liu
Can any of the company-specific risk be diversified away by investing in both Makalot Industrial and Nan Liu 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 Nan Liu 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 Nan Liu Enterprise, you can compare the effects of market volatilities on Makalot Industrial and Nan Liu 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 Nan Liu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Makalot Industrial and Nan Liu.
Diversification Opportunities for Makalot Industrial and Nan Liu
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Makalot and Nan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Makalot Industrial Co and Nan Liu Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Liu Enterprise 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 Nan Liu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Liu Enterprise has no effect on the direction of Makalot Industrial i.e., Makalot Industrial and Nan Liu go up and down completely randomly.
Pair Corralation between Makalot Industrial and Nan Liu
Assuming the 90 days trading horizon Makalot Industrial Co is expected to generate 1.74 times more return on investment than Nan Liu. However, Makalot Industrial is 1.74 times more volatile than Nan Liu Enterprise. It trades about 0.04 of its potential returns per unit of risk. Nan Liu Enterprise is currently generating about -0.01 per unit of risk. If you would invest 23,850 in Makalot Industrial Co on September 13, 2024 and sell it today you would earn a total of 7,700 from holding Makalot Industrial Co or generate 32.29% 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. Nan Liu Enterprise
Performance |
| Timeline |
| Makalot Industrial |
| Nan Liu Enterprise |
Makalot Industrial and Nan Liu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Makalot Industrial and Nan Liu
The main advantage of trading using opposite Makalot Industrial and Nan Liu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Makalot Industrial position performs unexpectedly, Nan Liu 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 Nan Liu will offset losses from the drop in Nan Liu's long position.| Makalot Industrial vs. Feng Tay Enterprises | Makalot Industrial vs. Ruentex Development Co | Makalot Industrial vs. WiseChip Semiconductor | Makalot Industrial vs. Novatek Microelectronics Corp |
| Nan Liu vs. Makalot Industrial Co | Nan Liu vs. President Chain Store | Nan Liu vs. Ruentex Development Co | Nan Liu vs. Eclat Textile 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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