Correlation Between Macroblock and Skardin Industrial
Can any of the company-specific risk be diversified away by investing in both Macroblock and Skardin Industrial 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 Macroblock and Skardin Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macroblock and Skardin Industrial, you can compare the effects of market volatilities on Macroblock and Skardin Industrial 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 Macroblock with a short position of Skardin Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macroblock and Skardin Industrial.
Diversification Opportunities for Macroblock and Skardin Industrial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macroblock and Skardin is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Macroblock and Skardin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skardin Industrial and Macroblock 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 Macroblock are associated (or correlated) with Skardin Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skardin Industrial has no effect on the direction of Macroblock i.e., Macroblock and Skardin Industrial go up and down completely randomly.
Pair Corralation between Macroblock and Skardin Industrial
Assuming the 90 days trading horizon Macroblock is expected to under-perform the Skardin Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Macroblock is 1.83 times less risky than Skardin Industrial. The stock trades about -0.03 of its potential returns per unit of risk. The Skardin Industrial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,120 in Skardin Industrial on September 5, 2024 and sell it today you would earn a total of 4,070 from holding Skardin Industrial or generate 130.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Macroblock vs. Skardin Industrial
Performance |
| Timeline |
| Macroblock |
| Skardin Industrial |
Macroblock and Skardin Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macroblock and Skardin Industrial
The main advantage of trading using opposite Macroblock and Skardin Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macroblock position performs unexpectedly, Skardin Industrial 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 Skardin Industrial will offset losses from the drop in Skardin Industrial's long position.| Macroblock vs. Skardin Industrial | Macroblock vs. Feng Ching Metal | Macroblock vs. Great China Metal | Macroblock vs. De Licacy Industrial |
| Skardin Industrial vs. Ruentex Engineering Construction | Skardin Industrial vs. Kao Fong Machinery | Skardin Industrial vs. Sporton International | Skardin Industrial vs. Kindom Construction Corp |
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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