Correlation Between Insas Bhd and Magni Tech
Can any of the company-specific risk be diversified away by investing in both Insas Bhd and Magni Tech 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 Insas Bhd and Magni Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insas Bhd and Magni Tech Industries, you can compare the effects of market volatilities on Insas Bhd and Magni Tech 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 Insas Bhd with a short position of Magni Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insas Bhd and Magni Tech.
Diversification Opportunities for Insas Bhd and Magni Tech
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insas and Magni is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Insas Bhd and Magni Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magni Tech Industries and Insas Bhd 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 Insas Bhd are associated (or correlated) with Magni Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magni Tech Industries has no effect on the direction of Insas Bhd i.e., Insas Bhd and Magni Tech go up and down completely randomly.
Pair Corralation between Insas Bhd and Magni Tech
Assuming the 90 days trading horizon Insas Bhd is expected to generate 1.85 times less return on investment than Magni Tech. In addition to that, Insas Bhd is 1.33 times more volatile than Magni Tech Industries. It trades about 0.03 of its total potential returns per unit of risk. Magni Tech Industries is currently generating about 0.07 per unit of volatility. If you would invest 163.00 in Magni Tech Industries on August 27, 2024 and sell it today you would earn a total of 94.00 from holding Magni Tech Industries or generate 57.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insas Bhd vs. Magni Tech Industries
Performance |
| Timeline |
| Insas Bhd |
| Magni Tech Industries |
Insas Bhd and Magni Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insas Bhd and Magni Tech
The main advantage of trading using opposite Insas Bhd and Magni Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insas Bhd position performs unexpectedly, Magni Tech 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 Magni Tech will offset losses from the drop in Magni Tech's long position.| Insas Bhd vs. Malayan Banking Bhd | Insas Bhd vs. Public Bank Bhd | Insas Bhd vs. Petronas Chemicals Group | Insas Bhd vs. Tenaga Nasional Bhd |
| Magni Tech vs. Coraza Integrated Technology | Magni Tech vs. Greatech Technology Bhd | Magni Tech vs. Cosmos Technology International | Magni Tech vs. British American Tobacco |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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