Correlation Between Mayer Steel and Advanced Analog
Can any of the company-specific risk be diversified away by investing in both Mayer Steel and Advanced Analog 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 Mayer Steel and Advanced Analog into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mayer Steel Pipe and Advanced Analog Technology, you can compare the effects of market volatilities on Mayer Steel and Advanced Analog 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 Mayer Steel with a short position of Advanced Analog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mayer Steel and Advanced Analog.
Diversification Opportunities for Mayer Steel and Advanced Analog
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mayer and Advanced is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mayer Steel Pipe and Advanced Analog Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Analog Tech and Mayer Steel 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 Mayer Steel Pipe are associated (or correlated) with Advanced Analog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Analog Tech has no effect on the direction of Mayer Steel i.e., Mayer Steel and Advanced Analog go up and down completely randomly.
Pair Corralation between Mayer Steel and Advanced Analog
Assuming the 90 days trading horizon Mayer Steel Pipe is expected to under-perform the Advanced Analog. But the stock apears to be less risky and, when comparing its historical volatility, Mayer Steel Pipe is 1.31 times less risky than Advanced Analog. The stock trades about -0.01 of its potential returns per unit of risk. The Advanced Analog Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,940 in Advanced Analog Technology on September 14, 2024 and sell it today you would lose (100.00) from holding Advanced Analog Technology or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mayer Steel Pipe vs. Advanced Analog Technology
Performance |
| Timeline |
| Mayer Steel Pipe |
| Advanced Analog Tech |
Mayer Steel and Advanced Analog Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mayer Steel and Advanced Analog
The main advantage of trading using opposite Mayer Steel and Advanced Analog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayer Steel position performs unexpectedly, Advanced Analog 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 Advanced Analog will offset losses from the drop in Advanced Analog's long position.| Mayer Steel vs. Froch Enterprise Co | Mayer Steel vs. Hsin Kuang Steel | Mayer Steel vs. Chung Hung Steel | Mayer Steel vs. Tung Ho Steel |
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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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