Correlation Between Top Material and MS Autotech
Can any of the company-specific risk be diversified away by investing in both Top Material and MS Autotech 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 Top Material and MS Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Material Co and MS Autotech CoLtd, you can compare the effects of market volatilities on Top Material and MS Autotech 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 Top Material with a short position of MS Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Material and MS Autotech.
Diversification Opportunities for Top Material and MS Autotech
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Top and 123040 is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Top Material Co and MS Autotech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MS Autotech CoLtd and Top Material 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 Top Material Co are associated (or correlated) with MS Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MS Autotech CoLtd has no effect on the direction of Top Material i.e., Top Material and MS Autotech go up and down completely randomly.
Pair Corralation between Top Material and MS Autotech
Assuming the 90 days trading horizon Top Material Co is expected to under-perform the MS Autotech. In addition to that, Top Material is 1.61 times more volatile than MS Autotech CoLtd. It trades about -0.13 of its total potential returns per unit of risk. MS Autotech CoLtd is currently generating about -0.17 per unit of volatility. If you would invest 450,500 in MS Autotech CoLtd on September 3, 2024 and sell it today you would lose (180,500) from holding MS Autotech CoLtd or give up 40.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top Material Co vs. MS Autotech CoLtd
Performance |
| Timeline |
| Top Material |
| MS Autotech CoLtd |
Top Material and MS Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Material and MS Autotech
The main advantage of trading using opposite Top Material and MS Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Material position performs unexpectedly, MS Autotech 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 MS Autotech will offset losses from the drop in MS Autotech's long position.| Top Material vs. Samsung Electronics Co | Top Material vs. Samsung Electronics Co | Top Material vs. LG Energy Solution | Top Material vs. SK Hynix |
| MS Autotech vs. EV Advanced Material | MS Autotech vs. Top Material Co | MS Autotech vs. Shinsegae Food | MS Autotech vs. Foodnamoo |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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