Correlation Between 2S Metal and Mena Transport
Can any of the company-specific risk be diversified away by investing in both 2S Metal and Mena Transport 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 2S Metal and Mena Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2S Metal Public and Mena Transport Public, you can compare the effects of market volatilities on 2S Metal and Mena Transport 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 2S Metal with a short position of Mena Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2S Metal and Mena Transport.
Diversification Opportunities for 2S Metal and Mena Transport
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 2S Metal and Mena is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding 2S Metal Public and Mena Transport Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mena Transport Public and 2S Metal 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 2S Metal Public are associated (or correlated) with Mena Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mena Transport Public has no effect on the direction of 2S Metal i.e., 2S Metal and Mena Transport go up and down completely randomly.
Pair Corralation between 2S Metal and Mena Transport
Assuming the 90 days horizon 2S Metal is expected to generate 1.24 times less return on investment than Mena Transport. But when comparing it to its historical volatility, 2S Metal Public is 3.0 times less risky than Mena Transport. It trades about 0.02 of its potential returns per unit of risk. Mena Transport Public is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 137.00 in Mena Transport Public on September 2, 2024 and sell it today you would lose (15.00) from holding Mena Transport Public or give up 10.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
2S Metal Public vs. Mena Transport Public
Performance |
| Timeline |
| 2S Metal Public |
| Mena Transport Public |
2S Metal and Mena Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2S Metal and Mena Transport
The main advantage of trading using opposite 2S Metal and Mena Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2S Metal position performs unexpectedly, Mena Transport 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 Mena Transport will offset losses from the drop in Mena Transport's long position.| 2S Metal vs. Diamond Building Products | 2S Metal vs. MCS Steel Public | 2S Metal vs. Asia Green Energy | 2S Metal vs. Hwa Fong Rubber |
| Mena Transport vs. Hwa Fong Rubber | Mena Transport vs. Karmarts Public | Mena Transport vs. Jay Mart Public | Mena Transport vs. IRPC Public |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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