Correlation Between MPLUS Corp and Ni Steel
Can any of the company-specific risk be diversified away by investing in both MPLUS Corp and Ni Steel 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 MPLUS Corp and Ni Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between mPLUS Corp and Ni Steel, you can compare the effects of market volatilities on MPLUS Corp and Ni Steel 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 MPLUS Corp with a short position of Ni Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPLUS Corp and Ni Steel.
Diversification Opportunities for MPLUS Corp and Ni Steel
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MPLUS and 008260 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding mPLUS Corp and Ni Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ni Steel and MPLUS Corp 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 mPLUS Corp are associated (or correlated) with Ni Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ni Steel has no effect on the direction of MPLUS Corp i.e., MPLUS Corp and Ni Steel go up and down completely randomly.
Pair Corralation between MPLUS Corp and Ni Steel
Assuming the 90 days trading horizon mPLUS Corp is expected to under-perform the Ni Steel. But the stock apears to be less risky and, when comparing its historical volatility, mPLUS Corp is 1.23 times less risky than Ni Steel. The stock trades about -0.43 of its potential returns per unit of risk. The Ni Steel is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 391,500 in Ni Steel on September 3, 2024 and sell it today you would lose (26,000) from holding Ni Steel or give up 6.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
mPLUS Corp vs. Ni Steel
Performance |
| Timeline |
| mPLUS Corp |
| Ni Steel |
MPLUS Corp and Ni Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPLUS Corp and Ni Steel
The main advantage of trading using opposite MPLUS Corp and Ni Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPLUS Corp position performs unexpectedly, Ni Steel 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 Ni Steel will offset losses from the drop in Ni Steel's long position.| MPLUS Corp vs. Sangsin Energy Display | MPLUS Corp vs. Busan Industrial Co | MPLUS Corp vs. UNISEM Co | MPLUS Corp vs. RPBio Inc |
| Ni Steel vs. Jin Air Co | Ni Steel vs. Automobile Pc | Ni Steel vs. Taegu Broadcasting | Ni Steel vs. AurosTechnology |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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